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The US economy shrank 3.5% in 2020 — the worst year since 1946

The Commerce Department
said Thursday that the U.S. economy grew at an annual rate of 4% in the fourth quarter of 2020. That followed a third-quarter GDP growthe rate of 33.4%.

Image source: U.S. Bureau of Economic Analysis

But the positive quarterly news was not nearly enough to counter the disaster the country experienced in the first and second quarters of 2020, CNN Business

What are the GDP numbers for 2020?

GDP decreased 3.5% in 2020 from the 2019 annual level, the Commerce Department said. The economy had grown 2.2% in 2019.

This is the first year-to-year GDP decline since 2009, when the economy contracted 2.5%, CNN said.

And it’s the worst dip since 1946.

The fourth-quarter 4% growth rate would have been an exceedingly good number if not for the current economic crisis spurred on by the pandemic and various federal, state, and local government reactions to the coronavirus.

From the U.S. Bureau of Economic Analysis:

The increase in fourth quarter GDP reflected both the continued economic recovery from the sharp declines earlier in the year and the ongoing impact of the COVID-19 pandemic, including new restrictions and closures that took effect in some areas of the United States.

5% annualized decrease in the economy in the first quarter coupled with massive losses in the second quarter and impressive third-quarter gains made for a crazy year.

“GDP shrank a record 31.4% on an annualized basis between April and June following the initial pandemic lockdowns,” CNN said. “In the following three months, it came screaming back at a record 33.4% annualized pace but that still wasn’t nearly enough to make up for the damage already done.”

And despite the positive third- and fourth-quarter numbers, CNN warned:

[T]here was still plenty to be concerned about: disposable incomes fell by 9.5% on an annualized basis in the fourth quarter of last year, while the personal savings rate remained elevated at 13.4%. For an economy driven by consumer spending, it’s not a good sign if people are leaving their money in the bank. Overall, personal income also declined, mostly due to the decrease in benefits as the CARES Act relief programs were winding down. With more stimulus agreed to since then and yet more eyed by the Biden administration, this might reverse in the future.

Conditions might not change very much in the first quarter of 2021, economists said.

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US economy tops projections, posts largest-ever GDP increase in third quarter just days before the election

The United States economy posted a record-breaking rebound in the third quarter and has gone a long way toward recovering from the devastation reaped by the coronavirus-related shutdowns, according to new data released by the Commerce Department.

From July through September, the U.S. gross domestic product grew by 7.4%, which equals an annualized rate of 33.1%, the Bureau of Economic Analysis announced in a news release on Thursday. It’s the largest quarterly GDP gain ever recorded.

Image Source: U.S. Bureau of Economic Analysis

The news, which comes just five days before the election, could provide a boost to President Donald Trump’s re-election chances. The president will undoubtedly tout the new numbers as evidence that he has successfully led the country through difficult economic times.

Though economists largely expected the GDP to rebound at an unprecedented rate in the third quarter, Bloomberg News noted that the increase still managed to top economists’ most recent prediction of a 32% increase, and blew away their forecast of an 18% increase from a few months ago.

The third-quarter gains were powered by major increases in consumer spending and business and residential investment, according to the BEA news release. The industries that benefitted most from increased consumer spending were health care, food services, motor vehicles, and clothing and footwear.

While the latest update is certainly good news for the economy, it should be noted that the third quarter gains followed the second quarter’s 31.4% plunge, which was also a record-breaking number. The economy is still climbing out of the deep hole it plunged into in April and May as the pandemic thrust the nation into an economic standstill.

According to The Hill, about 10.7 million of the more than 20 million jobs lost during the pandemic have yet to be recovered. The nation’s unemployment rate has improved to 7.9% over the last several months, but that figure is still more than double its pre-pandemic level.

“This is going to be seized upon by both ends of the political spectrum as either evidence of the strength of the post-lockdown economic rebound or a cursory warning that the gains could be short-lived,” James McCann, senior global economist at Aberdeen Standard Investments, told CNBC.

“[But] the reality is that the GDP numbers demonstrate that the U.S. economy did indeed rebound strongly as lockdown measures were lifted,” he added.

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GUT-CHECK: Elephant Skin Needed – SILVER OUT OF AIR!

This article was contributed by Portfolio Wealth Global.

In WW2, in order to defeat the German army and save Europe from total annihilation, both the Russians and Americans fought a common enemy, which was Hitler’s nightmarish vision for Europe and, indeed, the world. It wasn’t a real alliance, though. The two countries had vastly different approaches to life on planet Earth and as soon as this mission was completed, each of them went on their own separate ways.

The Democrats and Republicans saw a common enemy in the past few months. It isn’t the virus; it is the disappearance of the American consumer.

Here’s a question that every politician, on both sides of the aisle, has asked himself in the past few months: Just how important is spending to the GDP of the country? It’s estimated to be around 70% of it!

Now you see why, despite having no confidence in each other’s policies and truly remarkable levels of personal disgust and animosity towards certain players in the equation, they were able to rush stimulus bills through. The enemy was too great to fight over the usual stuff, so they put it aside for the greater good.

It doesn’t seem likely that will continue after the elections are concluded.

Courtesy: Seeking Alpha (ESI Analytics Limited)

What is America about? You got your answer in the past few months; the United States of America is a business enterprise, masquerading as a country.

The glue that binds all Americans together doesn’t exist anymore. If one does a road trip, passing through the various states that comprise the union and asks the following question: Has President Trump handled the crisis successfully or not? I guarantee that he’ll receive such a buffet of opposing answers that the only conclusion he would be able to make is that people are emotional right now, not logical.

What I want to do is re-introduce reason and common sense to the equation and to show you the potential realities ahead of us:

  1. Biden wins and Democrats sweep the House and Senate.
  2. Biden wins, but Republicans hold the Senate.
  3. Trump wins, but Democrats sweep the House and Senate.
  4. Trump wins and Republicans hold the Senate.

If possibility (A) occurs, this is the trajectory American enterprises will take: Green initiatives, solar energy, cannabis legalization, plenty of infrastructure programs, and continued reliance on outsourcing.

If possibility (D) happens, we’re looking at bigger defense budgets, better conditions for the banks, and massive upside for tech. The energy industry might get help as well.

In both cases, we believe infrastructure is important to both parties.


Lastly, what we’re seeing with the dollar looks to be over-stretched. We believe it has bottomed in the near-term, so a HANDS-OFF approach seems to be ideal with precious metals until the storm passes.

The dollar has been extremely weak since the FED had made their presence felt in March and April.

In the last two months, though, the FED has largely exited its aggressive asset purchases.

Clearly, markets are taking this as a sign that the recovery is strong and that there’s no rush for more injections, but that’s all wrong.

Most small businesses are toying with bankruptcy; seriously, it’s bad out there!

The stock market isn’t the gauge of the Main Street environment at all.

We are 100% confident that more aid is on the way.

The post GUT-CHECK: Elephant Skin Needed – SILVER OUT OF AIR! first appeared on SHTF Plan – When It Hits The Fan, Don't Say We Didn't Warn You.

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This article was contributed by James Davis with Future Money Trends. 

In 2008, when the markets plunged by 47%, central banks and the government HAD A CHOICE: allow debts and companies to run the normal course of bankruptcy or INFLATE AWAY by intervening in the process. The decision to bail out the financial system’s most powerful corporations, which were the banks, PAVED THE WAY for the unprecedented COVID-19 response and the way interest rates operate globally in 2020.

The Federal Reserve is an institution that COLLECTS DATA from innumerable sources and makes analytical decisions based on its lawful mandate and risk tolerance.

Failure to act in the Great Depression of 1929 has played a major role in the thought processes of FED chairmen over the decades.

A lack of adequate response in 1929 is what historians blame the central bank for. When there’s a monetary system that pegs gold ounces to the supply of government currency, public trust is measured by their ability to convert notes to precious metals. When there’s a STRICTLY CREDIT system in place, as we have right now, gold is marginalized in the eyes of the public.

Only 0.5% of global wealth is held in gold; most don’t care to learn about it and some EVEN SCORN it as a thing of the past, yet it is trading near all-time highs and has been a TOP-TIER performer in the 21st century.

In our opinion, gold is becoming LESS VOLATILE and more of a MUST-OWN asset since the ETFs have made it a thing of comfort to have exposure to.

In my networking group, which I highly respect, we had the following question raised in light of the comparisons made by the CHART BELOW between 2020 and 1929:



The question: Is the GREATEST CRASH on record coming?

We’ve gathered answers from billionaires and money managers who are MARKET VETERANS, along with large hedge fund managers. The result? NO MARKET CRASH is predicted!

I want to go over the reasons behind this since many feel like THE EARTH IS SHAKING beneath them and they’ve been living under that premise for years!

The Internet is FILLED WITH forecasts of doom, -80% wealth destructions and the worst economic conditions in modern history, all based on the chart below of the UNSUSTAINABLE NATIONAL DEBT.


Many people can’t sleep at night, worrying about the DEBT LOAD of the federal government, so I’d like to DECONSTRUCT this threat and bring it down to the level of the individual.

The United States’ GDP isn’t growing as fast as its debts are, so the ratio between productivity and debt issuance is GETTING SMALLER, which is to say that it is unsustainable.

Is there a connection between this and the markets? NOT REALLY…

As you can see, total debt is ALWAYS GROWING (since 1971, that is), and even the feared DEBT/GDP ratio is growing along with it, yet because of zero interest rates, it’s actually VERY EASY to pay the interest on the debt, which is what the government does. On top of that, many of the LARGEST EXPENSES are social entitlements, so it can be argued that cutting back on those will MATERIALLY EASE the debt burden, though I can’t say that there’s political will to entice the baby boomers just yet.

The bottom line is that (1) companies are innovating LEFT AND RIGHT, which is what is moving the world forward, and (2) interest rates are so low that owning equities is ONE’S ONLY CHOICE!

Instead of thinking of a market crash, think about the RECORD-HIGH wealth gap!

This is really what the world has to fear because it drives social unrest and PERPETUATES POVERTY. The fact that there is NO CRASH is what makes poverty linger; the people at the bottom of the food chain don’t get to capitalize on the wealthy’s mistakes.

The post Fw: Is the GREATEST CRASH Ever COMING? first appeared on SHTF Plan – When It Hits The Fan, Don't Say We Didn't Warn You.

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?Real GDP drops 32.9% in colossal second-quarter plunge due to pandemic shutdowns

The U.S. economy recorded its largest ever plunge in activity during this year’s second quarter, according to data released Thursday by the Commerce Department’s Bureau of Economic Analysis.

What are the details?

Gross Domestic Product, the combined tally of all goods and services produced, fell a colossal 32.9% between April and June as many Americans were forced out of work and asked to stay home as the coronavirus pandemic raged.

The plunge, however, was not quite as bad as predicted. Economists surveyed by Dow Jones had expected a 34.7% drop.

Still, the drop is the worst ever, CNBC reported, with the second worst coming in mid-1921.

What happened?

In short, the coronavirus pandemic and subsequent lockdown orders happened.

According to CNBC, “sharp contractions in personal consumption, exports, inventories, investment and spending by state and local governments all converged to bring down GDP.”

MarketWatch highlighted the 34.6% decline in consumer spending, which is the main engine of the economy, as the primary reason for the plunge.

That decline was especially noticed in service industries — such as travel and tourism, bars and restaurants, and medical services — which saw spending nosedive 43.5%

While a recovery appeared to begin in May when the country recorded the largest month-to-month jobs increase ever, the positive numbers were unable to offset the historic decline the U.S. economy experienced at the start of the pandemic.

What’s next?

Now, on the heels of the second-quarter news, some economists are forecasting a long and arduous recovery.

“[The report] just highlights how deep and dark the hole is that the economy cratered into in Q2,” Mark Zandi, the chief economist at Moody’s Analytics, told CNBC. “It’s a very deep and dark hole and we’re coming out of it, but it’s going to take a long time to get out.”

Others, such as Peter Boockvar, chief investment officer at the Bleakley Advisory Group, are taking a bit more positive approach.

Boockvar told CNBC that while the numbers are “alarming,” they are also “all self inflicted with about half the quarter reflecting almost full shutdown and the other half the slow reopening.”

Economists surveyed by MarketWatch had already predicted an 18% comeback for the third quarter. With the second quarter news, that number might be notched down slightly, but the outlet notes that the economy is still “primed to expand.”

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This article was contributed by Tom Beck of Portfolio Wealth Global. 

Clouds of Uncertainty – The World Awaits Re-Opening

Take a DEEP BREATH; whether you are like me and believe that the BEST COURSE OF ACTION is to protect the elderly and the immune-weakened, while the rest of us continue BUILDING our lives, unleashing the full power of ingenuity towards alleviating the suffering and fear of the compromised, so they can ALL return to normalcy – or – whether you’re of the opinion that everyone should stay at home, the fact remains that the PANIC PHASE is behind us. Now it’s time to defeat it COMPLETELY!

Things aren’t going back to normal anytime soon, though. Most people, even if they feel safe themselves, have families to consider. Going about your day as normal has now become a biological crime, a politicized topic.

Many grandchildren, sons and daughters aren’t visiting their parents and grandparents and I do expect that to continue for a while.

Malls have opened in many places, but consumers choose to STAY AWAY, even though the owners are making EFFORTS to keep the compounds sterile and clean.

We can’t just SNAP THE FINGER and go back to normal is my point.


This is where the above chart COMES IN. About 18M Americans, who represent roughly 12% of the workforce, believe that they’re only TEMPORARILY out of a job. In other words, out of the 38M who are currently officially unemployed, more than half believe it’s a PASSING PHASE.

These are STAGGERING numbers of people, who are presently not being productive in the marketplace.

Just 20 years ago, in the year 2000, the federal debt to GDP ratio stood at 58%. It has DOUBLED since then, sitting at 117% right now.

As you know, once a country goes above that 100% THRESHOLD, it is considered a banana republic of sorts.

The debt per taxpayer is $202,531 and the debt per citizen is $76,279. The official budget deficit for 2020 is OVER $2.1T and rising!


We need to understand why it is that Warren Buffett isn’t PULLING THE TRIGGER. We know it’s not because he shies away from buying after major dips. His biggest winners were American Express, bought right after the Oil Salad Scandal; GEICO, bought after bankruptcy; Coca Cola, bought after 1987; Wells Fargo, bought in the 1990 recession and The Washington Post, bought during the 1970s recession.

Clearly, Buffett isn’t scared of turbulence. If he isn’t buying, it’s because prices are TOO HIGH, not because he feels the world is ending.

I’m not saying that there is NOTHING ATTRACTIVE out there, only that the market itself is DECOUPLED from reality.

Personally, I’m following the guidelines I’ve set and purchasing according to the WATCH LIST.

This past Friday, the worst-ever unemployment report came out, yet markets rallied. These moves mean that investors are, as a whole, CLUELESS about the lurking danger.

As countries re-open, some cities, states, and countries will panic and DECIDE TO resume Stay-At-Home measures.


Bond yields CLEARLY REFLECT that investors are questioning the SWIFT REBOUND.

Huge sums of money are being loaned to the Treasury at the lowest-ever interest rates. This tells me that big players are attempting to RIDE OUT THE STORM, remaining liquid, so they can dance on the graves of the weak, who will get shaken out. CLEARLY, the most sophisticated money managers anticipate FALLOUT of epic proportions.

I’ve heard from highly REPUTABLE SOURCES that some believe they will not need to purchase businesses from others, but will be given them FOR FREE, as owners will only seek to be employed in the enterprise they once owned and rid themselves of the liabilities.

These predictions don’t make me happy.

In the next 12-18 months, your ability to WITHSTAND adversity, to see years of hard work go down THE TUBE, will be tested.

I can’t stress enough how valuable it is to own GOLD in times like these.