Experts are seeing multiple warnings of a possible 2020 recession on the horizon. Are you sure you’re making the right moves to help protect yourself in the event of an unexpected downturn? Learn more in this episode of USMR Market Insights with Coy Wells.
Has the Recession of 2020 Already Begun? – Video Transcription
Coy Wells: 00:00
Are we close to another recession? There is certainly evidence of an economic trouble ahead. Bloomberg's GDP tracker shows global growth slowing down to its third quarter of this year. There are also whispers that the international monetary fund will cut its 2019th growth forecast, already predicted to be the lowest since 2009. The Brookings Institute is sounding the alarm on what they're calling a “synchronized stagnation” of the world economies. The odds of a downturn in 2020 are increasing and some of the classic warning signs are starting to align.
Coy Wells: 00:32
One of the more reliable recession indicators is the spread between the three months and the 10-year treasury yield. When the yield on the shorter term duration security note moves higher than the longer duration note, it reflects investor's skepticism about future growth. Yield curve inversions have accurately predicted economic downturns for the past 50 years. In 2019, the yield curve was inverted for almost 5 months. Corporate health is also weak, non-financial corporate profits plummeted to 10.9% in the past quarter. Global profits have also been squeezed to low growth and rising debt have resulted in a dramatic increase in over lengthened companies worldwide. Volatile financial markets have raised the prospects of economic doom. They have been rocked by trade uncertainty, worldwide manufacturing slow down, and potential Brexit fallout. Over the past 6 months, major exchanges across the world have all suffered losses. Perhaps the greatest risk to the world economy is low-interest rates that paved the way for secular stagnation. Since the financial crisis, major economies have kept rates artificially low. They have also amassed large deficits and increased global debt by 50%. This has fueled asset bubbles and weakened one of the world's most potent recession weapons. Former U.S. Secretary of Treasury, Larry Summers, calls this the “Black Hole Monetary Economics”.
Coy Wells: 00:1:54
To learn more about recession risk, please call the number on your screen to receive U.S. Money Reserve's latest special report, How Much Gold is in the World. This report answers many questions you may have about the world's gold. So click on the link below, or call the number on your screen right now to get your copy and please give us your thoughts and share this video. If you're watching us from YouTube and would like to see more of our videos, subscribe to our channel so that you don't miss a single episode. I'm U.S. Money Reserve's, Coy Wells, and thank you for watching Market Insights.