We are entering The Greatest Depression because there is no exit.
I’ve endeavored to explain why The Greatest Depression is unstoppable in recent posts:
The Covid-19 Dominoes Fall: The World Is Insolvent March 16, 2020
What’s Collapsing Can’t Be Saved: Our Fraudulent Economy April 22, 2020 Will You Be Richer or ... Best Price: $10.99 Buy New $11.55 (as of 05:55 EST - Details)
Why Assets Will Crash May 4, 2020
Consumer Spending Will Not Rebound–Here’s Why May 18, 2020
This Is How Systems Collapse May 30, 2020
I’ll try to summarize all this as simply as possible:
1. The global economy’s cost structure has been fatally distorted by central bank policies of inflating asset bubbles and reducing interest rates to near-zero.
2. Earnings from labor have stagnated or eroded since the era of globalization / financialization took off around 2000. Survival+: Structuring... Best Price: $2.99 Buy New $12.98 (as of 11:30 EST - Details)
3. Everything costs too much, i.e. is no longer affordable from earnings alone, so the only way to maintain the current costly lifestyle is to borrow money and use it to pay current expenses. This is true for every sector: household, corporate and government.
4. As a result, everyone now needs every dollar of income just to pay their expenses, including interest and principal on their rising debts. There is no slack (buffers) in the system at all.
5. This can be visualized as a row of dominoes. Once the first domino falls, every domino will be toppled.
For example: a worker is laid off and can no longer afford to go to a favorite restaurant. The restaurant’s expenses are so high it can’t survive on reduced customer traffic, so it closes. The commercial landlord’s expenses are so high that he can’t afford to lower rents, but since no business can afford high rents, the space is empty and the landlord goes bust. The bank holding the mortgage then has to absorb a staggering loss because the property is no longer worth much because a building without tenants is just a money-pit of expenses and no income.