Easily overlooked issues regarding COVID-19

We read a lot in the news about the new Wuhan coronavirus and the illness it causes (COVID-19), but some important points often get left out.

[1] COVID-19 is incredibly contagious.

COVID-19 transmits extremely easily from person to person. Interpersonal contact doesn’t need to be very long; a taxi driver can get the virus from a passenger, for example. The virus may be transmissible even before an infected person develops symptoms. It may also be transmissible for a few days after a person seems to be over the virus; it is possible to get positive virus tests, even after symptoms disappear. Some people may have the disease, but never show symptoms.

[2] The virus likely remains active on inanimate surfaces such as paper, plastic, or metal for many days.

There haven’t been tests on the COVID-19 virus per se, but studies on similar viruses suggest that human pathogens may remain infectious for up to eight days. Some viruses that only infect animals can survive for more than 28 days. China is reported to be destroying paper currency from the hardest hit area, because people do not want to accept money which may have viruses on it. Clearly, surfaces in airplanes, trains and buses may also harbor viruses, long after a passenger with the virus has left, unless they have been thoroughly wiped down with disinfectant.

[3] Given Issues [1] and [2], about the only way to avoid spreading COVID-19 seems to be geographic isolation. 

With all of today’s travel, geographic isolation doesn’t work very well in practice. People need food and medical supplies. They need to keep basic services such as electricity and garbage collection operating. Suppliers of food and other services need to come and leave the area and that tends to spread COVID-19. Also, the longer a geographic area is isolated, the larger the percentage of the people within the area that is likely to get COVID-19. The problem is that the people need to have contact with others in the area for purposes such as buying food, and that tends to spread the disease.

[4] The real story regarding the number of deaths and illnesses seems to be far worse than the story China is telling its own people and the world.

The real story seems to be that the number of deaths is far greater than the number reported–perhaps 10 times as high as being reported. The number of illnesses is also much higher. At one point, facilities doing cremations in the Wuhan area were reported to be doing four to five times the normal number of cremations. Some of the bodies in the Wuhan area now need to be sent to other areas of China because there is not enough local cremation capacity.

China doesn’t dare tell its people how bad the situation really is, for fear of panic. They want to tell a story of being in control and handling the situation well. The news media in the West repeat the stories that the government-controlled publications of China provide, even though they seem to present a much more favorable situation than really seems to be the case.

[5] Our ability to identify who has the new coronavirus is poor.

While there is a test for the coronavirus, it costs hundreds of dollars to administer. Even with this high cost, the results of the tests aren’t very reliable. The test tends to produce many false negatives. The virus may be present somewhere inside the person being tested, but not in the areas touched by swabs of the throat and nose.

[6] Some people get much more severe symptoms from COVID-19 than others.

Most people, perhaps 80% of people, seem to get a fairly light form of the COVID-19 illness. Groups that seem particularly prone to adverse outcomes include the elderly, smokers, those who are obese, and those with high blood pressure, diabetes, or poor immune systems. Males seem to have worse outcomes than females.

Strangely enough, there is speculation that people with East Asian ancestry (Chinese, Japanese, or Vietnamese) may have a higher risk of adverse outcomes than those of European or African ancestry. One of the things that is targeted by the disease is the ACE2 receptor. The 1000 Genome Project studied expected differences in ACE2 receptors among various groups. Based on this analysis, some researchers (in non-peer-reviewed studies, here and here) predict that those of European or African ancestry will tend to get lighter forms of the disease. These findings are contested in another, non-peer-reviewed study.

Bolstering the view that East Asians are more susceptible to viruses that target the ACE2 receptor is the fact that SARS, which also tends to target the ACE2 receptor, tended to stay primarily in China, Hong Kong, Taiwan, and Singapore. While there were cases elsewhere, they tended to have few deaths.

Observational data with respect to COVID-19 is needed to determine whether there truly is a difference in the severity of the illness among different populations.

[7] China has been using geographical quarantine to try to hold down the number of COVID-19 cases. The danger with such a quarantine is that once the economy is down, it is very difficult to come back to the pre-quarantine state.

Data shows that China’s economy is not reopening quickly after the extended New Year holiday finished.

Figure 2. China daily passenger flows, relative to Chinese New Year. Amounts are now down more than 80% and have not increased, even as some businesses are theoretically reopening. Chart by ANZ, copied by WSJ Daily Shot Feb. 17, 2020.

Figure 3. China property transactions, before and after Chinese New Year. Chart by Goldman Sachs. Reprinted by WSJ Daily Shot, Feb. 17, 2020.

All businesses will be adversely affected by a lack of sales if they need to continue to pay overhead expenses. Small and medium-sized businesses will be especially adversely affected. Bloomberg reports that if a shutdown lasts for three months, there is a substantial chance that these businesses will run through their savings and fail. Thus, these businesses may be permanently lost if the economy is down for several months.

Also, restarting after a shut-down is more difficult than it might appear. Take, for example, a mother who wants to go back to work. She will likely need:

  • Public transportation to be operating, so she has a way to get to work;
  • School to be open, so she doesn’t need to worry about her child while she is at work;
  • Masks to be available, so that she and her child can comply with requirements to wear them;
  • Stores providing necessities such as food to be open, or she may be too hungry to work

If anything is missing, the mother is likely not to go back to work. Required masks seem to be a problem right now, but other pieces could be missing as well.

Businesses, too, need a full range of workers to restart their operations. If the inspector doing the final inspection is not available, the business may not really be able to ship finished products, even if most of the workers are back.

[8] A shutdown of as little as three months is likely to be damaging to the world economy.

Multiple things are likely to go wrong:

(a) Commodity prices are likely to fall steeply, because of low demand from China. Oil prices, in particular, are likely to fall steeply, perhaps to $30 to $35 per barrel. Besides cutbacks in oil demand from China, there is the issue of a general reduction in long distance travel, because of fear of traveling with other passengers with COVID-19.

(b) US businesses, such as Apple, will find their supply chains broken. They won’t know when, and if, they can ship products.

(c) Debt defaults are likely to become more common, especially in China. The longer the slowdown/shutdown lasts, the greater the extent to which debt defaults are likely to spread around the world.

(d) The world economy is likely to be pushed into recession, without an easy way to get out again.

[9] The longer the shutdown lasts, the more likely there is to be a major collapse of the Chinese economy. 

In the event of a long-term shutdown, it would seem likely that, at a minimum, a new leader would take over. In fact, there would seem to be a significant chance of major changes within the economy. For example, the provinces of China that are able to restart might attempt to restart, leaving the more damaged areas behind. In such a case, instead of having a single Chinese government to deal with, there might be multiple governmental units to deal with.

Each governmental unit might consist of a few provinces trying to provide services such as they are able, without the benefit of the parts of the economy that are still shut down. Each governmental unit might have its own currency. If this should happen, China will be able to provide far fewer goods and services than it has in the recent past.

[10] Planners everywhere have been guilty of “putting too many eggs in one basket.”

Planners today look for efficiency. For example, placing a large share of the world’s industry in China looks like it is an efficient approach. Unfortunately, we are asking for trouble if the Chinese economy hits a bump in the road. Using just-in-time supply lines looks like a good idea as well, but if a major supplier cannot provide parts for a while, then having inventory on hand would have been a better approach.

If we want systems to be sustainable, they really need a lot of redundancy. Redundant systems are not as efficient, but they are much more likely to be sustainable through difficult times. There is a recent article in Nature that talks about this issue. One of the things it says is,

A system with a single cycle is the most unstable because the deletion of any cycle-node or link breaks the sustaining feedback mechanism.

“A system with a single cycle” is basically similar to “putting all of our eggs in one basket.” “Deletion of any cycle-node or link” is something like China running into coronavirus problems. We probably need a world economy that consists of many nearly separate local economies to be certain of long-term world economy stability. Alternatively, we need a great deal of redundancy built into our systems. For example, we need large inventories to work around the possibility of missing contributions from one country, in the case of a problem such as a major epidemic.

Conclusion

The world economy may become very different, simply because of COVID-19. The new virus doesn’t even need to directly affect the rest of the world very much to create a problem. The United States, Europe, and the rest of the world are very much dependent on the continued operation of China. The world economy has effectively put way too many eggs in one basket, and this basket is now not functioning as expected.

If China is barely producing anything for world markets, the rest of the world will suddenly discover that long supply chains weren’t such a good idea. There will be a big scramble to try to fill in the missing pieces of supply chains, but many goods are likely to be less available. We may discover quickly how much we depend upon China for everything from shoes to automobiles to furniture to electronics. World carbon dioxide emissions are likely to fall dramatically because of China’s problems, but will the accompanying issues be ones that the world economy can tolerate?

The thing that is ironic is that it is possible that the West’s fear of the new coronavirus may be overblown–we really won’t know what the impact will be with respect to people of European or of African descent until we have had a better chance to examine how the virus affects different populations. The next few weeks and months are likely to be quite instructive. For example, how will the Americans and Australians who caught COVID-19 on the cruise ships fare? What will the health outcomes be of non-Asians being brought back from Wuhan to their native countries on special planes?

 

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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2,589 Responses to Easily overlooked issues regarding COVID-19

  1. Pingback: Demand For Physical Precious Metals Surge Due To Fears About Disruptions In The Global Supply Chain - Free World Economic Report

  2. Zerohedge is reporting that Beijing reports of COVID-19 have increased.
    https://www.zerohedge.com/geopolitical/coronavirus-deaths-outside-china-surge-overnight-explosion-new-cases-suggests-outbreak

    Excerpts:

    A hospital in Central Beijing has reported 36 novel coronavirus cases as of Thursday, a sharp increase in the number of cases reported in the capital city. The new cases bring Beijing’s total to 45, stoking fears that the outbreak could accelerate.

    Among the infected at Fuxing Hospital in Beijing’s Xicheng district were eight medical workers, nine cleaning staff and 19 patients, along with members of their families.

    Also:

    So far, the confirmed cases in the city have been scattered around 15 of its 16 districts.

    • Hm, if this escalates further and further to eventually overwhelming-abandoning nation’s capital, the one key question remains, are we approaching the time horizon for the unimaginable – iodine tablets needed across the world?

      • Ed says:

        To late they are made in China. LMAO

      • I presume that you are talking about not being able to maintain nuclear power plants and spent fuel pools, leading to rising levels of radiation. If this happens, our thyroid glands are likely to be most affected. Taking potassium iodide pills can help block the radioactive iodine from being absorbed, thus protecting the gland from radiation injury.

        We are really running into many different problems simultaneously. We don’t know in which order problems will hit.

        At some point, we may not be able to take care of nuclear power plants and spent fuel pools. They require an active supply of electricity to keep pumping and circulating water. California, with its disdain for coal and natural gas would seem to be at high risk area for losing electricity supplies early on.

        How many people will be alive when all of this happens is not clear. “All across of the world,” has different practical meanings, depending upon the population remaining.

    • Chrome Mags says:

      https://www.worldometers.info/coronavirus/

      Here’s another observation regarding stats on the virus; the Chinese official virus numbers at the site above are likely lower than actual, however could maybe hope trend was still a reflection of the overall numbers. And those new cases numbers had been declining, from peaking in the 300’s to the 200’s then in the teens, until yesterday’s total hit 393 new cases, close to 400. It begs the question; how it could have been coming down to suddenly jog upwards again, unless the numbers are so bogus no trend can be accurately discerned.

    • Covidinamonthorayearoradecade says:

      “A hospital in Central Beijing has reported 36 novel coronavirus cases as of Thursday, a sharp increase in the number of cases reported in the capital city. The new cases bring Beijing’s total to 45, stoking fears that the outbreak could accelerate.”

      what are they thinking to say “could accelerate”?

      it has accelerated… from 9 cases to 45…

      some of us like to use percentages…

      that’s a 500% increase…

      right up there with the South Korea increase…

      it may become a pandemic by March or April…

  3. Ed says:

    I am beginning to think the disease is the destroyed environment of China. 1.3 billion on the edge of dying from pollution just add a typical flu and it is the straw that breaks the dictators back.

    • Dennis L. says:

      That would seem to be as good a guess as any other which if true means moving production out of China and into other countries leads to the same issues, what to do with waste. In “Limits to Growth” pollution is one of the variables plotted as I recall. The limits may not be the finite resources but the finite places to put the industrial waste and still make it economic to produce many goods.

      If you are correct, it will be interesting to see which goods are economic to produce based on their waste cost. Production can be robotized, but the waste is more or less constant.

      Again, if the environment thesis is correct, China is not going to be a world power, indeed imagine putting a nuclear submarine to sea with so much as one infected sandwich that is overlooked. A cruise ship would look like a picnic compared to sailors falling over at their stations, nuclear missiles, reactors and who knows what else.

      This is not looking to be an easy problem.

      Dennis L.

    • you are as correct as anyone can be

      an infinite number of ‘problems’ must inevitably cumulate in a single catastrophe, there’s probably a law of physics in there somewhere

      The old thing of ”for want of a nail the shoe was lost”—and so on… we just don’t know which nail will come loose and cripple the horse and throw the rider

      the ultimate problem of course will come through denial, because denial will result in dictators reacting violently to ‘prove’ something isn’t happening.

      we had that when the first doc who blew the whistle was threatened by state officials.
      this situation was held until the spread of infection couldn’t be hidden,

      we will see the same thing in saudi—they will go on pretending that their oil field are bottomless, until they hit bottom and the oil stops flowing. this is likely to happen about the same time as the don’s ‘saudi america’ collapses.

      the the don will be in a state of unstable denial and react violently to prove himself right

      thus the political leader will take any course of action to prove himself right and hold onto power.

      the coronovirus was made worse by political denial, but it’s a problem not confined to bodily sickness

      • Tim Groves says:

        Somehow, whatever happens, it always leads back to Donald. Amazing, that.

        Deagel has been forecasting huge drops in population and per capita GDP for 2025 in most of the old industrialized nations for the past fifteen years or so. At one time, they were projecting the US population would go down to 60 million. But rejoice, the latest projection is for 99 million!!

        The Big Question has always been, how do we get from here to there? And the answer, until now, for the US, was swirling around economic collapse due to the loss of global dominance, with a dash of civil war thrown in. However, we now have the potential scenario in which the Chinese, upset because they suspect someone in the US dropped a bioweapon targeting East Asian DNA on them in Wuhan, or some Dr. Evil character living in a cave somewhere, react to their own mess by dropping a bioweapon on the Americans and everyone else, targeting European DNA, and inflicting massive casualties on people of European descent everywhere.

        http://www.deagel.com/country/forecast.aspx

        • possibly you misread my comment because you wanted to.

          before I got to the donald, I cited the saudi dictators as a prime example of reality-denial, also chinese reality-deniers. I could have included our own Boris, or Korean Kim, or the Aussie lunatic with equal de-merit.

          The don is a symptom of our disease, not the cause. He denies reality, so leaves himself open to account for his stupidity. His comments are ridiculous, so leaves himself open to ridicule.

          If of course you think that the emperor is wearing the finest suit of clothes you’ve ever seen, and he is a world class intellect, that is an opinion you are entitled to.

          reality though, is difficult to deny long term

          • Tim Groves says:

            Donald is the anointed one—anointed by the Electoral College to serve as POTUS.
            But a lot of people have never accepted his election as legitimate—not ordinary working people per say, but a lot of people in high places nestled comfortably within the bowels of the body politic.

            These people have been trying very hard to delegitimize the Don and remove him by power, illicitly, unconstitutionally and conspiratorially, or in concert if you will.

            That’s a big problem for the US, and it also makes good theatre, but my personal opinion of the Don is neither here nor there. I was never a fan. I never even watched a single episode of the Apprentice.

            But I must confess to regarding Trump as a giant who bestrides the Potomac like a Colossus, as a Hercules who is doing his best to clean the stables, and most of all as a Gulliver pinned down by an army of Lilliputians. And I’m looking forward to the bit where he takes just revenge on all those who have been plotting against him. On top of that, I have to concur with some of the Greatest Minds of history that enemies are a good test of a man’s character.

            You can always judge a man by the quality of his enemies.
            — Oscar Wilde

            I ask you to judge me by the enemies I have made.
            — Franklin D. Roosevelt

            “Judge a man by the reputation of his enemies.”
            – Arabian Proverb

            “A man with no enemies is a man with no character.”
            — Paul Newman

            “Blessed are ye, when men shall revile you, and persecute you, and shall say all manner of evil against you falsely, for my sake. Rejoice, and be exceeding glad: for great is your reward in heaven: for so persecuted they the prophets which were before you.”
            — Matthew 5:11-12, King James Version

            “Viel feind, viel ehr” (Translation: many enemies, much honour)
            — Georg von Frundsberg

            “You have enemies? Why, it is the story of every man who has done a great deed or created a new idea. It is the cloud which thunders around everything that shines. Fame must have enemies, as light must have gnats. Do no bother yourself about it; disdain. Keep your mind serene as you keep your life clear.”
            — Victor Hugo

            “Loose change can often be found under seat cushions!!”
            — Ebenezer Scrooge

            • Robert Firth says:

              “He doth bestride the narrow world / Like a Colossus …”
              Julius Caesar, Act I scene ii. The words are those of
              Cassius, plotting “impeachment”.

            • when someone attains the heights of statesmanship, which I think we agree would describe the POTUS, I think the people at large are entitled to expect statesmanlike behaviour.

              The don’s behaviour, looking in as I do from the UK, is more akin to that of a petulant child. This is confirmed I think by his own words and actions, not my opinions.
              A child lashes out at those considered at fault, and blames every else for those faults. This behaviour is condoned by those who fawn around him, obviously with their own agendas

              Children usually grow out of it, some as age progresses, grow into it

              One can only compare him to his immediate predecessor, who at no point demeaned others (as far as I observed), and who seemed to carry the status of a gentleman. (not an easy title to earn). No doubt he had his faults. As did say, Roosevelt, who also carried the same demeanour. ((with his faults too)
              Pointing out the obsession with god and guns would be seen as an outrageous fault by many—are those the faults you choose to agree with?

              Obama wasn’t scared of disagreement.

              The don has got rid of anyone who disagrees with him. This is one of the first steps of the dictator.

              As far as I know, no other POTUS has had to settle a $25 m lawsuit for fraud before taking office. Other incumbents have had their dalliances with women, none as far as I know are on record bragging about it.

              but beyond all that, my mystification extends to the neckless millions who stand cheering and waving banners of support. Don’t they know the monster they are cheering for? Or the theofascist sycophants who stand behind him? Are there pictures of Obama with godbotherers standing around him, pretending to love jesus?…somehow i doubt it

              is the jesusmachine so strong there that people actually believe this stuff? do they really not know where this is leading? All wannabe dictators brag about the size of their armies.

              And your cross references are double edged. Character can be judged good or bad

              And if I sat up in bed at 3am tweeting mindless hate, I think I would get complaints from the management

              Or you could of course be winding me up—and you’re not the emperors tailor after all

      • Tim Groves says:

        My prime suspect for the Dr. Evil in a cave scenario would be Davros of Davos!

        • Robert Firth says:

          “You are an enemy of globalisation. You must be exterminated. Exterminate, exterminate, …”

          Dr Who, “The Davos Operation”, with Tom Baker (The Doctor), Mary Tamm (Romana), and George Davros (as himself).

  4. Dan says:

    Let it be noted as of 3:20 p.m. February 20th not one single headline or news article on MSN main page concerning COVID-19.
    The silence is deafening.

    • The WSJ does have quite a few COVID-19 articles, on the front page (not the top, however) of its website and also in the “World” section. It does better than a lot of other media.

      A recent WSJ article is Evacuation of Diamond Princess Set Off Race for U.S. Hospital Beds.

      The arrival of 14 evacuees with the new coronavirus tested the U.S. public health system’s readiness to handle an influx of cases

      It sounds, from the article, as if it was tricky to find beds for the 14 who tested positive. There aren’ t lots of US beds set up for highly infectious diseases.

      Also, the 14 who tested positive rode back in the same plane with more than 300 supposedly non-sick passengers from the cruise ship. The article reports,

      Another three who developed symptoms in flight also went to hospitals for testing, a CDC spokesman said. No results were available as of Thursday.

      This sounds like a story that will keep continuing.

      • Chrome Mags says:

        “Also, the 14 who tested positive rode back in the same plane with more than 300 supposedly non-sick passengers from the cruise ship. The article reports,”

        There have been some really questionable actions taking place recently, from no infection experts on the cruise ship docked in Japan, to 14 day quarantines when more time is likely a better strategy to be safe, and now this one which ranks right up there at the top. Most jets have air circulation systems that do not filter/kill viruses, so all those passengers shared the same air. I mean come on people.

        It may turn out the reason the virus becomes a pandemic from an epidemic, is because the characteristics of the virus was above people’s ability to outsmart it. If that’s the case, then as a species we deserve what we get.

        • Robert Firth says:

          “Evolution is smarter than you are”, Leslie Orgel. We are the largest biomass of untapped prey on the planet; this outcome was only a matter of time. “Thou art weighed in the balances, and art found wanting.” And in many depictions, the one holding the balances is Nemesis.

        • Thanks! It has some interesting things that I hadn’t seen before. Here are a few samples:

          I found this one strange:

          The Federal Bureau of Investigation is trying to avert the spread of coronavirus in the United States by purchasing $40,000 worth of hand sanitizer and face masks, according to CNBC.

          That should solve the problem!

          Iran urges restricting religious gatherings in holy city after spike in coronavirus cases.

          Not surprising, if they are closing schools and restricting travel.

          The Chinese port city of Wenzhou is set to somewhat pare back coronavirus-related lockdown measures to aid in economic recovery, according to a social media post from the city’s government Thursday, Reuters reported.

          The government will reopen highway entrances and exits and cancel some freeway checkpoints.

          We will have to watch and see if these changes (one city of 9 million) get fuel use rising. That will be a sign people are actually out using the roads and starting factories back up.

          [In Korea] After a 61-year-old woman who attended the church was diagnosed with the virus on Tuesday, health authorities ordered all 1,001 churchgoers to quarantine themselves. Daegu Mayor Kwon Young-jin told a briefing early Thursday that 90 of them said they were symptomatic, while nearly 400 could not be reached by phone.

          Oh, dear!

          • Xabier says:

            The FBI purchase sound like it’s for the FBI staffers -‘ But we are doing it for the country, to limit the outbreak!’ Ha, sure….

            They will be disappointed to find out that the masks and sanitizers are really of next to no use, as far as one can see.

            • Xabier says:

              The FBI are like the old Bolsheviks: ‘The vanguard of the Revolution need the best food, clothes and medicines sot hat they can work for the people!’

              Ah, good old human nature……

            • Robert Firth says:

              Xabier, FBI bureaucrats, like all others, hardly ever do what is useful: they do what will make a good press release. And when their folly is exposed, the press releases will be fish wrapping and nobody will remember.

  5. Bruce Steele says:

    The 14 Cov-19 positive patients from the Diamond Princess were flown back in a containment box on the same airplane as the other evacuees.

    https://www.businessinsider.com/coronavirus-japan-cruise-passengers-isolated-plane-2020-2

    Our local CVS pharmacy is out of r-95 masks and is limiting the blue surgical masks to one box per. The local feed store still has r-95 masks with a four box limit and they said they couldn’t restock when their supply gets sold.

    • The WSJ article didn’t talk about the containment box that I noticed.

      Of course, the three people who came down with symptoms during the flight were in the midst of everyone else flying.

    • Robert Firth says:

      Thank you, Bruce. I read that article. The “containment” box won’t work. The virus is inside, the prey outside. That means the box requires an underpressure, an atmospheric pressure less on the inside than the outside. But the box door opens inwards, and so is designed to contain an overpressure. That door will leak.

  6. Chrome Mags says:

    I was on YouTube and on a message board for a video on the Corona virus was the following:

    “I’m a truck driver, and speaking with warehouse personnel with imported products from China, they have already received notices from the importers that certain shipments are on hold for at least six months. This is just the beginning of supply chain disruptions. I fear that many local small companies that sell imported products from China have been making plans on reducing business or closing them down. A six month disruption could push the world into a definite recession.
    On the positive note, local companies are using this opportunity to jumpstart local manufacturing businesses.”

    • Tango Oscar says:

      This is how the contagion and panic will really start. Many US stores have a third or more of their goods from China. If the virus is shutting down Beijing and Wuhan, where are these items suddenly going to come from? In cases where there is only one main supplier like vitamins and antibiotics (China), there isn’t going to be another supplier for months or years if ever and certainly not to the present day scale.

      And this same concept applies to every other JIT lean manufacturing globalization partaking business, which is pretty much all of them at this point. Think about the thousands of parts that go into cell phones, computers, and cars. If this situation continues, within a matter of weeks this is going to impact millions of companies and absolutely crush the global economy. China’s exports are astronomically large, to say nothing of the other countries that could be impacted in a similar fashion within the next month or so. We are watching the global supply chains break down in real time.

      • Robert Firth says:

        We Have Been Here Before. In the second century BC, an explorer called Chang Ch’ien (張騫) or Zhang Qian opened a supply chain between China and the West, which later became known as the Silk Road. The Roman Empire became importers of silk, but the cost was exorbitant, because most of the supply chain had to be protected from bandits, at great military expense.

        The Emperor Justinian made the excellent decision to localise silk production. He sent two Nestorian monks all the way to China, and they brought back, hidden in their bamboo pilgrim staffs, the silk worms and the mulberry leaves they fed on. And so the monopoly was broken. And perhaps it is all going to happen again..

        There is a wonderful fantasy story based on this history, called “Silk Roads and Shadows”, by Susan Shwartz, with a most competent heroine in the form of Byzantine Princess Alexandra. Recommended.

    • CTG says:

      Just to remind everyone that starting a factory is not a simple task. The machines are from outside USA and probably China and so are the raw materials, parts, etc. It takes at least 1 year to get everything ready (from hiring to training, sourcing to test runs and quality acceptance). I am afraid, if this continues, we may not even have that 1 year.

    • “At least six months”

      That will definitely be a huge problem. It has come up so quickly that little adaptation is possible.

      Also, it is long enough that it will mess up the financial system. Getting a loan to start a new company likely will not be possible.

      • Chrome Mags says:

        “At least six months”

        “That will definitely be a huge problem. It has come up so quickly that little adaptation is possible.”

        Yeah, things are too tightly strung for a long disruption. I’m figuring China will at some point demand people return to work and things will start moving again. People have to eat, so they have to work, bills have to be paid, loans repaid, etc., so this recent lull was just China’s brief opportunity to try and nip this in the bud. Obviously it didn’t work as intended and we’re all going to have to get use to yet another virus, that may go dormant in the Summer and return in the same or different version next winter.

        • Xabier says:

          I suspect so, if no effective vaccine can be developed it will probably become endemic and a part of our lives -a return to the norm pre-antibiotics and sophisticated medical science.

          A positive would be the reduction in the huge burden of elderly people, for whom adequate pensions and care will be impossible to provide in any case. Again, a return to the demographics of an earlier age -that of our grandparents.

          However, if the virus doesn’t weaken the % of serious cases -about 15-20% it seems – means that many irreplaceable people could be lost every year, and the savings on the care of the elderly negated by the pressure on hospitals created by all those serious cases requiring drugs and oxygen.

          Measures taken to attempt to limit contagion lock-downs – do work, but are incompatible with the functioning of society and commerce: but an unchecked, infectious while asymptomatic endemic disease also brings huge costs and would make many activities too dangerous for most sensible people.

    • GBV says:

      “What concerns me the most? Supply chain disruptions and their impacts on a world awash in debt.”

      I’m sure this will elicit more calls from folks here at OFW to “let the virus run its course” instead of risking any impact to BAU… as if authoritarian governments of the world (and make no mistake, they’re pretty much all authoritarian at this point – some are just more subtle about it than others) would ever restrain themselves from trying to exert influence/control and allow anything as monumental as that to occur naturally.

      Collapse has been on its way for a long time now. Perhaps the time for endless talking about the end of BAU has come to an end, and the time to prepare for an uncertain future (if you haven’t started preparing already) is upon us?

      Cheers,
      -GBV

  7. Hide-away says:

    There are at least another 30 people from around the world that have come off the plague ship and now tested to have coronaviruss in their home countries after being ‘clear’ when they left Japan, all in quarantine.
    Japan in their wisdom allowed 500 ‘clear’ people to disembark and roam around Japanese cities, so the genie is well and truely out of the bottle.

    The nail in the horseshoe, is really just Leibig’s law of the minimum, that when coupled with modern JIT stocking methods, guarantees the world is in for a whole lot of pain and misery over the next year or 2.

    China, by shutting down is in a complete bind, as everything needs to be restarted, but parts of the country are in lockdown, with other provinces likely to go into their own lockdown at different times, so Leibig’s law and JIT work against all other factories because of one minor part here and there.

    We have been talking about all these possible problems on both here and before on The Oil Drum for well over a decade, and now the problem is here. The world is in a state of disbelief, I hope everyone here is as prepared as they can be.

    • Covidinamonthorayearoradecade says:

      “The world is in a state of disbelief, I hope everyone here is as prepared as they can be.”

      all true about Leibig Minimum and JIT…

      but I don’t think this is a situation full of “disbelief”…

      actually, I suspect that it’s merely a situation where 99+% of people are oblivious to the unfolding economic crisis, though many/most people whom I have contact with seem to have an awareness of a health crisis far far away…

      the economic awareness will change when it gets to the time when most people have a problem caused by JIT breakdown or at least know someone who has such a problem…

    • Robert Firth says:

      China is not alone:

      “A dozen towns in northern Italy were on effective lockdown Saturday after the new virus linked to China claimed a first fatality in Italy and sickened an increasing number of people who had no direct links to the origin of the virus.”

      AP, dateline Rome, 22 February. Paging Prince Prospero.

  8. Covidinamonthorayearoradecade says:

    https://www.worldometers.info/coronavirus/

    it’s noteworthy that the serious/critical % of active cases which was 19% a few days ago and then rose to 20 and then 21 is now at 22%…

    Singapore, Japan, Hong Kong, Thailand, Taiwan all rising in cases by 3 to 5% daily…

    and the WINNER is:

    South Korea… 31 cases two days ago rose to 57 yesterday and NOW is at 156!!!!!!!

    can we get some Doomer Math here? that’s about 500% in two days!!!!!!!

    that MIGHT BE exponential growth…

    where are Fast Eddy and Baby Doomer?

    I mean, the doom is hitting the fan for real…

    the spike in cases in Beijing in the north of China is ominous…

    ah, the smell of doom in the evening…

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