By Karl Arnold Belser
8 March 2020
|The cartoon below shows what I think is obvious. The governments of the world has exaggerated the threat of the Coronavirus such that it is likely to cause a world wide economic decline - at least a recession and maybe a depression.
The Coronavirus appears to be a serious flu variant that has a higher mortality rate than does the normal flu. There is no vaccine and the virus is very contagious. Hence one gets panic.
The mortality rate appears to be between 1 and 3 percent of those infected. However it also appears that the mortality rate is much higher among older people and people with some kind of preexisting condition. Until there is a vaccine just about every person on Earth will be exposed to the virus. This could mean that millions of people wil die suchas what happened with the Spanish Ffu between 1918 and 1920.
The governments of the world are taking aggressive action to slow the spread of the Coronavirus. This appears to be working in China, the origin of the outbreak.
China has basically shut down their economy by quarantine. The Chinese economy is about one fifth of the world economic activity. The world economy is highy diversified ssuch that many other countries will be adversely affected by China's lower economic activity.. It is unclear at this point if this collateral damage will be worse than the virus itself..
The world economy appears to be in a fragile state with huge national debts and the central banks artificially holding interest rates low. If economic activity significantly slows many companies will be unable to pay interest on their debts, go bankrupt and in turn lay off many workers. This would result in a significant economic collapse world wide.
I personally do not think that the central banks will be able to stem this decline. If central banks print money, there might be insufficient good to purchase. This in turn would result in inflation.
I note the similarity between government over reaction and anaphylaxis in the human immune system. When the body over reacts anaphylaxis shock occurs which in turn can greatly damage the body. The key question with the Coronavirus management is whether economic shock will occur.
POSSIBLE LONG TERM EFFECTS
The Coronavirus may be the trigger for an economic reset like the one Uruguay experienced in the 1960s. Debt might be defaulted upon, welfare benefits cut or eliminated, and a strict military law imposed until recovery occurs. In other words civilization will probably not end. Civilization will just change and adapt to the new world circumstances. This is the paradigm shift I expect.
The most important thing is to tell the truth about the situation. For example, I note that I am over 80 and have only one lung. Hence i am one of the people likely to die if infected.. I accept this possibility.
Given this precondition, I can still avoid crowded situations. For example I may have to give up square dancing if the situation gets worse. I certainly want to avoid interaction with other people since it appears to be difficult to determine if a person is a carrier of Coronavirus.
One should try to arrange activity such that one doesn't have to go to the grocery store often. This might mean accumulating a supply of frequently used items.
The Internet and the telephone allows a large amount of interaction among people with no risk of spreading infection.. I suspect that part of the paradigm shift that is happening in society will revolve around staying at home.
Last updated Maarch 8, 2020
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