Now that everyone seems excited about going back to work and making some real money instead of counting on government’s hands-outs, the big questions that is fair to ask can be formulated as follows:
- Will the economy immediately spring back to life?
- Instead will it take more time?
- Then, how long do we have to wait till its normal life resumes?
- Or finally, will it ever be the same again?
Based on the above my take is that it will take at least tree years for the economy to dust itself up before standing up again and resuming a new “normal”. However, I don’t expect this new “normal” to be ever as buoyant as it was in March of 2020.
It only will be a fraction of what we had then, and many elements will change forever. For one thing, our hugely increase indebtedness will drag us down and will force government to tax us more. Expect GDP to sink between 15 to 25 percent in most countries.
Deflation will be part of our daily lives and both the housing and the stock market will suddenly become a lot more affordable. Governments will be expected to take better care of their citizens, especially in the area of healthcare, safety net, and global environment, and this too will cost immensely.
Finally, leisure, tourism, business travel and education as we know them, will all change tremendously.
Let’s check back in three years from now...
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