Why The Economy Collapsed So Fast, 40% Of US Companies Losing Money, Corporate Debt At 47% Of GDP (Video)
Why The Economy Collapsed So Fast, 40% Of US Companies Losing Money, Corporate Debt At 47% Of GDP Video by Silver Report
We never had an economic recovery! 1 in 6 US corporations are zombie companies meaning their interest expenses exceed their earnings before interest and taxes. Total US non-corporate debt was just under $10 trillion which is 47% of GDP. 40% of US companies are losing money and all of this was for 2019 before any other catalyst entered the picture.
There has been an enormous amount of effort put into propping up certain assets and the stock market has benefited greatly along with the wealthy. The Federal Reserve policy has helped to inflate the everything bubble and that’s the reason the stock market crash of 2020 turned into an economic collapse so fast. Typically once an economic bubble pops it’s almost impossible to inflate it again because the underlying activity was unable to support the valuations.
Another major factor is we are entering the peak of this maturing bond wall due to the debt that was taken out in the wake of the great recession. In truth, this is just a continuation of the last recession and what we are seeing is the debt is coming due, This is the reason we saw an all-time record store closures in 2019. Buybacks have left these corporations without any cash and the Fed already has lowered interest rates to zero percent. The situation is shared by several economies around the world so it appears the house of cards has come down at the first strong gust of wind.