Things could be getting very bad over the next couple years.

This year, 2020 was certainly difficult for the global economy.  With the shutdown due to the Coronavirus, the economic impact is immense.  While things improved a bit in the 3rd quarter, the second was so bad that it will certainly throw things into the negative for the year.

My guess is we see at least a 5% drop in the U.S. GDP for the year.  The EU is going to be even worse.

This is all before the second wave of shutdowns take place, which are already starting.  The UK is on lockdown with other EU countries following suit.

<center>https://foreignpolicy.com/wp-content/uploads/2017/02/crop-gdp.jpg?w=800&h=383&quality=90
[Source](https://foreignpolicy.com/wp-content/uploads/2017/02/crop-gdp.jpg?w=800&h=383&quality=90)</center>

So far, we saw the greatest drop in GDP in any recession, or the 1930s depression.  This is unprecidented, to the point that [President Xi China](https://finanz.dk/chinas-xi-world-economy-in-worst-recession-since-great-depression/) called it the worst recession since the 1930s.

While the lockdowns is being done in an effort to save lives, it will end up doing the exact opposite.  Humanity does better with economic prosperity.  When the situation reverses, people die.

For example, we are still early in this process yet we are already seeing food shortages.  In the United States, mage grocer, [Giant, is already limiting purchases](https://www.cnbc.com/video/2020/11/16/giant-food-stores-imposes-product-limits-to-avoid-shortages.html) in an effort to offset these shortages.

The problem is that with the interruption in farming and meat processing, food shortages are going to be the norm.  In other countries, shortages tend to become famine.

None of this is positive for GDP or global growth.

Unfortunately, 2021 is looking like it will be worse than 2020.  Heading into 2022, we could see near a 50% drop in global GDP.

The hospitality industry and anything related to it is already in tatters.  Airlines, rental cars, cruise lines, and restaurants have seen an enormous loss of business.  Hundreds of thousands of small businesses already went under, with more on the horizon.

Automobile manufacturing is on a multi-year decline, something that hit another low in 2020.  With shutdowns looming on a wide scale, this industry is going to get hit harder.

Of course, all of this impacts employment.  Even with a safety net, people end up making less money than under normal conditions.  In economies like the United States, where 70% of GDP is consumption, this is a major draw down.

Here is the daily consumption of oil:

<center>https://www.eia.gov/outlooks/steo/images/Fig6.png
[Source](https://www.eia.gov/outlooks/steo/report/global_oil.php)</center>

Even with the rebound in Q3, we will likely see a drop of more than 8 million barrels per day.  The fact that lockdowns are starting again means that the benefits from Q3 will quickly be given back.  

Oil consumption is still a big barometer of the health of the global economy.  Even though renewable energy production (consumption) has increased, it is still a minor part of the global energy picture.

Unfortunately, 2020 might have just been a preview of worse things to come.  Many industries are struggling and another shutdown will absolutely obliterate them. 

This is a story that will keep getting worse as we progress through next year.  Look for a major low to hit as we enter 2022.

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