Economic depression looms as jobless claims continue to rise

Share

The Dow Jones dropped 450 points on April 3 after jobless claims in the U.S. continue to skyrocket. With this development, analysts might be leaning toward an incoming depression.

To add more tensions to this ongoing crisis, the International Monetary Fund (IMF) is becoming more aggressive in trying to implement solutions for the expected economic bloodbath.

Kristalina Georgieva, managing director of the IMF, said at a news conference:

“Never in the history of the IMF have we witnessed the world economy come to a standstill”

She further added that this is worse than the financial crisis back in 2008.

IMF to give support for emerging markets

In her opening remarks in the joint IMF and World Health Organization (WHO) press conference, Georgieva said that she will do whatever it takes to help developing economies around the world. She added:

“Emerging market and developing economies are particularly vulnerable – and this is a point that I want to emphasize […] Their health systems are already fragile and now they have been hit terribly hard economically. The IMF is giving those countries high priority.”

The IMF has a US$1 trillion [AU$1.6 trillion] war chest and it is determined to use as much of it as necessary. She also added the IMF is encouraging central banks in developed countries to support emerging markets and developing countries.

In the same conference, the WHO warned that countries that will lift quarantine restrictions early could face a higher risk of economic damage from the coronavirus pandemic. Tedros Adhanom Ghebreyesus, WHO director-general added:

“We are all aware of the profound social and economic consequences of the pandemic […] Ultimately the best way for countries to end restrictions and ease their economic effects is to attack the virus.”

WHO officials further added that government lockdowns are not enough to contain the outbreak but are necessary. However, these lockdowns will have an impact on the economy and society.

An economic depression? Only if the virus remains on the loose

On April 3, CNBC’s “Mad Money” host Jim Cramer told viewers that the U.S. economy might go into depression instead of a recession, saying:

“I’ve got to be honest with you: We could be on the verge of a depression. Not a recession, a depression if things don’t go right […] This is gonna be a brutal period, but if we handle things right, it will be a short depression […] Still, I think we’re making some real progress on the economic front.”

A recession lasts two quarters while an economic depression lasts longer.

Alec Padua

Alec a former mobile app developer turned independent singer-songwriter and busker based in the Philippines, who goes by the stage name "Alex Corner". He has released songs on Spotify and other music digital platforms. A self-taught trader and financial market enthusiast, he also started his own YouTube channel and blog called "The Trading Comedy" where he documents his trading journey in the Philippine Stock Market and beyond. He is also a casual gamer and streamer who enjoys FPS, RPG, and strategy games as well as conducting live charting sessions in the financial markets.

Published by
Alec Padua

Recent Posts

Princess Diana did this food, diet trend before it became a ‘trend’

Darren McGrady was a personal chef to Queen Elizabeth before working for Princess Diana. Princess…

5 hours ago

Jennifer Lopez postponed Alex Rodriguez wedding because of Marc Anthony: Rumor

Jennifer Lopez didn’t, allegedly, postpone her wedding to Alex Rodriguez because of the coronavirus pandemic.…

5 hours ago

Angelina Jolie shock: Actress’s brother living a run-down apartment?

Angelina Jolie and her brother, James Haven are, allegedly, living very different lives. According to…

5 hours ago