Car sales have plunged 38% so far this year to a level that has not been seen since the 2008 Great Recession.
With much of the world still under lock-down, most everyday people are lacking stable income. With consumer sales down significantly, most industries are seeing a drastic slump in sales across the board. As BeInCrypto reported previously, U.S. consumer confidence has likewise plummeted.
However, as consumer spending drops, more industries may soon be on the ropes and will be requesting a bailout — the auto industry looks like it will be one of them.
US Auto Industry Suffers
As purchasing power for the average American falls, U.S. car sales have also sharply dropped. According to the Bureau of Economic Analysis, car sales are down some 38% in 2020. The only other comparable drop is what took place during the Great Recession — and it was then that the auto industry also received a bailout.
Car sales just plunged 38%.
Just as bad as the Great Recession.
Auto retailers… another industry lining up for a government bailout. pic.twitter.com/RplMxXiD1U
— Otavio (Tavi) Costa (@TaviCosta) April 7, 2020
Given that the Federal Reserve has been printing new currency at a record pace of $60 million per minute, such a bailout may be on the table. The airline industry and other sectors have already received emergency aid, so other industries will likely also be asking for assistance in the next stimulus package.
A Deflationary Crisis?
In the cryptocurrency space, there is often talk about an inflationary crisis due to the Federal Reserve’s incessant money-printing. However, the global crisis today is one of depressed demand. There simply is not enough spending to keep the economy afloat which will send prices crashing downward, resulting in a ‘deflationary shock.’
Bitcoin, being a deflationary currency, is best designed to counter an inflationary situation and is one of its main selling points. However, how will Bitcoin and the cryptocurrency space fare under a deflationary crisis? The verdict is still out on that. With the Federal Reserve already at rock-bottom interest rates, it does not have many tools left to deal with such a crisis.
Bitcoin, at the time of writing, has remained resilient, however — it is currently up 3.30% on the daily and is trading above $7,350.