An economist has warned that the recession induced by Coronavirus is the most serious global disruption since World War II. Gary Shilling said a quick recovery is unlikely.
Shilling spoke to Bloomberg TV on Monday about the state of the economy. He said a fast recovery was “not realistic.”
“I think it’s going to be very slow,” Shilling said. “This is like 1929.”
“Stocks rallied 40 percent after the initial fall, 52 percent retracement. But then, as people appreciated the depths of the depression, it fell another 86 percent … 89 percent decline.”
“I think we are in a similar pattern, and the idea of a V-recovery is not realistic. The idea of the destruction of supply chains, factory disruptions, I think the recession is going to stretch into next year and we’ll probably have a very slow recovery,” he said.
“It could take years to fully recover. This is the most traumatic event in the world, in my opinion, since World War II, and equally disruptive.”
Shilling, who’s been described as a “legendary economist”, said consumers would initially be cautious.
“After pandemics,” he said. “You find a very slow, drawn-out recovery. It actually favors labor, because you tend to store more labor than you have capital.”
“But it really can take decades before you are completely recovered.”
“I do not think it will take that long because of the massive underlying stimuli this time, but I just do not see the consumer roaring back.”
“People are getting used to being at home, doing things they did not do before,” he said.
Darragh Roche is a journalist covering U.S. politics and media
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