Economies won’t be able to recover after shutdowns

Citizens seem to be clamoring for shutdowns to prevent the spread of COVID-19. There is one major difficulty, however. Once an economy has been shut down, it is extremely difficult for the economy to recover back to the level it had reached previously. In fact, the longer the shutdown lasts, the more critical the problem is likely to be. China can shut down its economy for two weeks over the Chinese New Year, each year, without much damage. But, if the outage is longer and more widespread, damaging effects are likely.

A major reason why economies around the world will have difficulty restarting is because the world economy was in very poor shape before COVID-19 hit; shutting down major parts of the economy for a time leads to even more people with low wages or without any job. It will be very difficult and time-consuming to replace the failed businesses that provided these jobs.

When an outbreak of COVID-19 hit, epidemiologists recommended social distancing approaches that seemed to be helpful back in 1918-1919. The issue, however, is that the world economy has changed. Social distancing rules have a much more adverse impact on today’s economy than on the economy of 100 years ago.

Governments that wanted to push back found themselves up against a wall of citizen expectations. A common belief, even among economists, was that any shutdown would be short, and the recovery would be V-shaped. False information (really propaganda) published by China tended to reinforce the expectation that shutdowns could truly be helpful. But if we look at the real situation, Chinese workers are finding themselves newly laid off as they attempt to return to work. This is leading to protests in the Hubei area.

My analysis indicates that now, in 2020, the world economy cannot withstand long shutdowns. One very serious problem is the fact that the prices of many commodities (including oil, copper and lithium) will fall far too low for producers, leading to disruption in supplies. Broken supply chains can be expected to lead to the loss of many products previously available. Ultimately, the world economy may be headed for collapse.

In this post, I explain some of the reasons for my concerns.

[1] An economy is a self-organizing system that can grow only under the right conditions. Removing a large number of businesses and the corresponding jobs for an extended shutdown will clearly have a detrimental effect on the economy. 

Figure 1. Chart by author, using photo of building toy “Leonardo Sticks,” with notes showing a few types of elements the world economy.

An economy is a self-organizing networked system that grows, under the right circumstances. I have attempted to give an idea of how this happens in Figure 1. This is an image of a child’s building toy. The growth of an economy is somewhat like building a structure with many layers using such a toy.

The precise makeup of the economy is constantly changing. New businesses are formed, and new consumers grow up and take jobs. Governments enact laws, partly to collect taxes, and partly to ensure fair treatment of all. Consumers decide which products to buy based on a combination of factors, including their level of wages, the prices being charged for the available goods, the availability of debt, and the interest rate on that debt. Resources of various kinds are used in producing goods and services.

At the same time, some deletions are taking place. Big businesses buy smaller businesses; some customers die or move away. Products that become obsolete are discontinued. The inside of the dome becomes hollow from the deletions.

If a large number of businesses are closed for an extended period, this will have many adverse impacts on the economy:

  • Fewer goods and services, in total, will be made for the economy during the period of the shutdown.
  • Many workers will be laid off, either temporarily or permanently. Goods and services will suddenly be less affordable for these former workers. Many will fall behind on their rent and other obligations.
  • The laid off workers will be unable to pay much in taxes. In the US, state and local governments will need to cut back the size of their programs to match lower revenue because they cannot borrow to offset the deficit.
  • If fewer goods and services are made, demand for commodities will fall. This will push the prices of commodities, such as oil and copper, very low.
  • Commodity producers, airlines and the travel industry are likely to head toward permanent contraction, further adding to layoffs.
  • Broken supply lines become problems. For example:
    • A lack of parts from China has led to the closing of many automobile factories around the world.
    • There is not enough cargo capacity on airplanes because much cargo was carried on passenger flights previously, and passenger flights have been cut back.

These adverse impacts become increasingly destabilizing for the economy, the longer the shutdowns go on. It is as if a huge number of deletions are made simultaneously in Figure 1. Temporary margins, such as storage of spare parts in warehouses, can provide only a temporary buffer. The remaining portions of the economy become less and less able to support themselves. If the economy was already in poor shape, the economy may collapse.

[2] The world economy was approaching resource limits even before the coronavirus epidemic appeared. This is not too different a situation than many earlier economies faced before they collapsed. Coronavirus pushes the world economy further toward collapse. 

Reaching resource limits is sometimes described as, “The population outgrew the carrying capacity of the land.” The group of people living in the area could not grow enough food and firewood using the resources available at the time (such as arable land, energy from the sun, draft animals, and technology of the day) for their expanding populations.

Collapses have been studied by many researchers. The book Secular Cycles by Peter Turchin and Sergey Nefedov analyze eight agricultural economies that collapsed. Figure 2 is a chart I prepared, based on my analysis of the economies described in that book:

Figure 2. Chart by author based on Turchin and Nefedov’s Secular Cycles.

Economies tend to grow for many years before the population becomes high enough that the carrying capacity of the land they occupy is approached. Once the carrying capacity is hit, they enter a stagflation stage, during which population and GDP growth slow. Growing debt becomes an issue, as do both wage and wealth disparity.

Eventually, a crisis period is reached. The problems of the stagflation period become worse (wage and wealth disparity; need for debt by those with inadequate income) during the crisis period. Changes tend to take place during the crisis period that lead to substantial drops in GDP and population. For example, we read about some economies entering into wars during the crisis period in the attempt to gain more land and other resources. We also read about economies being attacked from outside in their weakened state.

Also, during the crisis period, with the high level of wage and wealth disparity, it becomes increasingly difficult for governments to collect enough taxes. This problem can lead to governments being overthrown because of unhappiness with high taxes and wage disparity. In some cases, as in the 1991 collapse of the central government of the Soviet Union, the top level government simply collapses, leaving the next lower level of government.

Strangely enough, epidemics also seem to occur within collapse periods. The rising population leads to people living closer to each other, increasing the risk of transmission. People with low wages often find it increasingly difficult to eat an adequate diet. As a result, their immune systems easily succumb to new communicable diseases. Part of the collapse process is often the loss of a significant share of the population to a communicable disease.

Looking back at Figure 2, I believe that the current economic cycle started with the use of fossil fuels back in the 1800s. The world economy hit the stagflation period in the 1970s, when oil supply first became constrained. The Great Recession of 2008-2009 seems to be a marker for the beginning of the crisis period in the current cycle. If I am right in this assessment, the world economy is in the period in which we should expect crises, such as pandemics or wars, to occur.

The world was already pushing up against resource limits before all of the shutdowns took place. The shutdowns can be expected to push the world economy toward a more rapid decline in output per capita. They also appear to increase the likelihood that citizens will try to overthrow their governments, once the quarantine restrictions are removed.

[3] The carrying capacity of the world today is augmented by the world’s energy supply. A major issue since 2014 is that oil prices have been too low for oil producers. The coronavirus problem is pushing oil prices even lower yet.

Strangely enough, the world economy is facing a resource shortage problem, but it manifests itself as low commodity prices and excessive wage and wealth disparity.

Most economists have not figured out that economies are, in physics terms, dissipative structures. These are self-organizing systems that grow, at least for a time. Hurricanes (powered by energy from warm water) and ecosystems (powered by sunlight) are other examples of dissipative structures. Humans are dissipative structures, as well; we are powered by the energy content of foods. Economies require energy for all of the processes that we associate with generating GDP, such as refining metals and transporting goods. Electricity is a form of energy.

Energy can be used to work around shortages of almost any kind of resource. For example, if fresh water is a problem, energy products can be used to build desalination plants. If lack of phosphate rocks is an issue for adequate fertilization, energy products can be used to extract these rocks from less accessible locations. If pollution is a problem, fossil fuels can be used to build so-called renewable energy devices such as wind turbines and solar panels, to try to reduce future CO2 pollution.

The growth in energy consumption correlates quite well with the growth of the world economy. In fact, increases in energy consumption seem to precede growth in GDP, suggesting that it is energy consumption growth that allows the growth of GDP.

Figure 3. World GDP Growth versus Energy Consumption Growth, based on data of 2018 BP Statistical Review of World Energy and GDP data in 2010$ amounts, from the World Bank.

The thing that economists tend to miss is the fact that extracting enough fossil fuels (or commodities of any type) is a two-sided price problem. Prices must be both:

  1. High enough for companies extracting the resources to make an after tax profit.
  2. Low enough for consumers to afford finished goods made with these resources.

Most economists believe that an inadequate supply of energy products will be marked by high prices. In fact, the situation seems to be almost “upside down” in a networked economy. Inadequate energy supplies seem to be marked by excessive wage and wealth disparity. This wage and wealth disparity leads to commodity prices that are too low for producers. Current WTI oil prices are about $20 per barrel, for example (Figure 4).

Figure 4. Daily spot price of West Texas Intermediate oil, based on EIA data.

The low-price commodity price issue is really an affordability problem. The many people with low wages cannot afford goods such as cars, homes with heating and air conditioning, and vacation travel. In fact, they may even have difficulty affording food. Spending by rich people does not make up for the shortfall in spending by the poor because the rich tend to spend their wealth differently. They tend to buy services such as tax planning and expensive private college educations for their children. These services require proportionately less commodity use than goods purchased by the poor.

The problem of low commodity prices becomes especially acute in countries that produce commodities for export. Producers find it difficult to pay workers adequate wages to live on. Also, governments are not able to collect enough taxes for the services workers expect, such as public transit. The combination is likely to lead to protests by citizens whenever the opportunity arises. Once shutdowns end, these countries are especially in danger of having their governments overthrown.

[4] There are limits to what governments and central banks can fix. 

Governments can give citizens checks so that they have enough funds to buy groceries. This may, indeed, keep the price of food products high enough for food producers. There may still be problems with broken supply lines, so there may still be shortages of some products. For example, if there are eggs but no egg cartons, there may be no eggs for sale in grocery stores.

Central banks can act as buyers for many kinds of assets such as bonds and even shares of stock. In this way, they can perhaps keep stock market prices reasonably high. If enough gimmicks are used, perhaps they can even keep the prices of homes and farms reasonably high.

Central banks can also keep interest rates paid by governments low. In fact, interest rates can even be negative, especially for the short term. Businesses whose profitability has been reduced and workers who have been laid off are likely to discover that their credit ratings have been downgraded. This is likely to lead to higher interest costs for these borrowers, even if interest rates for the most creditworthy are kept low.

One area where governments and central banks seem to be fairly helpless is with respect to low prices for commodities used by industry, such as oil, natural gas, coal, copper and lithium. These commodities are traded internationally, so it is not just their own producers that need to be propped up; the market intervention needs to affect the entire world market.

One approach to raising world commodity prices would be to buy up large quantities of the commodities and store them somewhere. This is impractical, because no one has adequate storage for the huge quantities involved.

Another approach for raising world commodity prices would be to try to raise worldwide demand for finished goods and services. (Making more finished goods and services will use more commodities, and thus will tend to raise commodity prices.) To do this, checks would somehow need to go to the many poor people in the world, including those in India, Bangladesh and Nigeria, allowing these people to buy cars, homes, and other finished goods. Sending out checks only to people in one’s own economy would not be sufficient. It is unlikely that the US or the European Union would undertake a task such as this.

A major problem after many people have been out of work for a quite a while is the fact that many of these people will be behind on their regular payments, such as rent and car payments. They will be in no mood to buy a new vehicle or a new cell phone, simply because they have been offered a check that covers groceries and not much more. They will remain in a mode of cutting back on purchases, not adding more. Demand for most kinds of goods will remain low.

This lack of demand will make it difficult for business to have enough sales to make it profitable to reopen at the level of output that they had previously. Thus, employment and sales are likely to remain depressed even after the economy seems to be reopening. China seems to be having this problem. The Wall Street Journal reports China Is Open for Business, but the Postcoronavirus Reboot Looks Slow and Rocky. It also reports, Another Shortage in China’s Virus-Hit Economy: Jobs for College Grads.

[5] There is a significant likelihood that the COVID-19 problem is not going away, even if economies can “bend the trend line” with respect to new cases.

Bending the trend line has to do with trying to keep hospitals and medical providers from being overwhelmed. It is likely to mean that herd immunity is built up slowly, making repeat outbreaks more likely. Thus, if social isolation is stopped, COVID-19 illnesses can be expected to revisit prior locations. We know that this has been an issue in the past. The Spanish Flu epidemic came in three waves, over the years 1918-1919. The second wave was the most deadly.

A recent study by members of the Harvard School of Public Health says that the COVID-19 epidemic may appear in waves until into 2022. In fact, it could be back on a seasonal basis thereafter. It also indicates that more than one period of social distancing is likely to be required:

“A single period of social distancing will not be sufficient to prevent critical care capacities from being overwhelmed by the COVID-19 epidemic, because under any scenario considered it leaves enough of the population susceptible that a rebound in transmission after the end of the period will lead to an epidemic that exceeds this capacity.”

Thus, even if the COVID-19 problem seems to be fixed in a few weeks, it likely will be back again within a few months. With this level of uncertainty, businesses will not be willing to set up new operations. They will not hire many additional employees. The retired population will not run out and buy more tickets on cruise ships for next year. In fact, citizens are likely to continue to be worried about airplane flights being a place for transmitting illnesses, making the longer term prospects for the airline industry less optimistic.

Conclusion 

The economy was already near the edge before COVID-19 hit. Wage and wealth disparity were big problems. Local populations of many areas objected to immigrants, fearing that the added population would reduce job opportunities for people who already lived there, among other things. As a result, many areas were experiencing protests because of unhappiness with the current economic situation.

The shutdowns temporarily cut back the protests, but they certainly do not fix the underlying situations. Instead, the shutdowns add to the number of people with very low wages or no income at all. The shutdowns also reduce the total quantity of goods and services available to purchase, regardless of how much money is added to the system. Many people will end up poorer, in some real sense.

As soon as the shutdowns end, it will be obvious that the world economy is in worse condition than it was before the shutdown. The longer the shutdowns last, the worse shape the world economy will be in. Thus, when businesses are restarted, we can expect even more protests and more divisive politics. Some governments may be overthrown, or they may collapse without being pushed. I fear that the world economy will be further down the road toward overall collapse.

 

 

 

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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4,744 Responses to Economies won’t be able to recover after shutdowns

    • el mar says:

      Here is a discription of the surprise by shortonoil:
      Oil is $13 this morning, and the industry will never recover; nor will the economy. The only thing that you can now believe is what you see in the “real world” with your own eyes. The stories are made up, the pandemic was made up, the central banks coming to the rescue is made up. We are at the end of the oil age, and that includes everything that has gone with it. There is no help coming because the helpers can not even help themselves.

      In my area of the real world there are no planes in the sky, and over my head was one of the busiest air lanes in the nation. There are no ships on the Chesapeake Bay which has been for the last 500 years one of the busiest shipping lanes in the world. When Chesapeake shipping has stopped so also has the east coast of the US from New York to Georgia. There is very little traffic, and only a few stores, and businesses are still open. In my real world almost every thing has stopped. Turn off the television and the internet, and go take a “real” look at yours. The rest are only acting as distractions to burn up what little time there may be remaining.
      https://peakoil.com/forums/the-price-of-crude-pt-14-t73760-440.html?sid=923c0f160b77f46ef47323afaaa22252

      • Great observations. Perhaps it’s the very last exhaled breath of that giant IC super-organism indeed, never to visit us again, whale on the beach.

        But, here comes the kicker, by all logic in next phase the worms and other bugs will decompose the carcass. Something else would appear. The entropy must flow “downhill”..

        How different, how bad, we are not there yet.

    • Your chart describes our current problem.

    • Hubbs says:

      The turkey never saw it coming.

  1. CTG says:

    NASSIM TALEB: Consider The Thanksgiving Turkey…

    “Consider a turkey that is fed every day,” Taleb writes. “Every single feeding will firm up the bird’s belief that it is the general rule of life to be fed every day by friendly members of the human race ‘looking out for its best interests,’ as a politician would say.

    “On the afternoon of the Wednesday before Thanksgiving, something unexpected will happen to the turkey. It will incur a revision of belief.”

    Here’s Taleb’s famous chart.

    https://i.insider.com/5474a6536bb3f7b2528b4567?width=700&format=jpeg&auto=webp

  2. Ed says:

    One or two year ban on out of country travel.
    https://www.rt.com/news/486295-czech-borders-closed-year-president/

  3. CTG says:

    WTI at $13.48 as of this moment. I wonder whi was the one who said just 10 hours ago that I was pessimistic and that at this rate, we will be below $10 by thr and of the week ? Hrrmmmph….can that guy show his/her face? ….

    I think it will be end of tomorrow….

    • At prolonged $5-15 situation, something very important of systemic nature might irreversibly snap, aka phase shift, however we don’t now how long this downswing will last, too much at stake.

      For example, the Saudies and Gulfies reinvested a lot into the global economy over the decades, they might start re-evaluation of their security alliances and investment portfolio diversification (this revenue stream now crashed as well). Or perhaps it’s too late for it anyway (their contingency plans “B” lapsed the right window of opportunity few yrs ago), and therefor instadoomers get their over night all spectrum ricocheting collapse..

      I’m still in the camp, there will be tomorrow, though..

      • Harry McGibbs says:

        Worth noting that, although Brent futures are up around $27 p/b, real oil prices are well short of that, for example:

        “The real oil market is killing Nigeria.

        “One of the country’s benchmark grades, Bonny Light, fell to about $12 or $13 a barrel this week, according to traders monitoring the West African market. The deeply loss-making level shines a light on a chasm that’s emerged between real crude prices that producers are fetching, and headline futures contracts like Brent…”

        https://uk.finance.yahoo.com/news/nigeria-banner-oil-hits-12-230000178.html

    • CTG says:

      Gosh…. $11.39 now. David in a one billion years… how is that for less than 10 bucks end of this week.? Maybe end of day?

      I close my eyes. Something will break..derivatives?

      • Covidinamonthorayearoradecade says:

        hi C T G…

        I thought I was actually saying that you were braver (bolder) than me since you predicted end of the week and I only said in May…

        good job…

        the guy who last month predicted negative $ was correct…

        wow…

    • WTI was at $11.22 when I looked.

      • Tango Oscar says:

        $10.75 now. The oil market is going bankrupt as we’re here typing. This meltdown is happening so fast I expect they’ll be bailing out energy companies by Friday at this point.

  4. Dennis L. says:

    A guess:

    We are looking in the wrong place, the supply chain failure will come in the food area. To date we in the US have been lucky in the supermarkets, they are open and there is staff to man them. Even if people recover from this virus there are hints that the recovery takes considerable time and uncertainty as to its completeness. Not all people contribute necessary actions to an economy, replacing those who do will be a challenge.

    Food is perishable as we all know, we as humans don’t run long without it, we in the west have long had the luxury of debating which diet is best, perhaps a diet with something to eat will be good enough.

    It seems to me that the biggest issue will be farm workers, something like 1.3% of the population in the US works on the farm. The number of farms have declined from 7 million in 1935 to 2 million today. If I lose my tenants, my land is worthless, it is an asset with no income. A family farms my land, young children have traditionally gone to school, vectors for viruses.

    https://markets.businessinsider.com/news/stocks/farming-industry-facts-us-2019-5-1028242678#agriculture-s-1-053-trillion-contribution-to-the-us-economy-is-higher-than-the-gdp-of-indonesia1

    Some are touting garden’s, they are incredible work, require knowledge of the soil in the garden, what will grow, what needs to be planted where. A garden ideally requires water other than rain, more complexity. Prior to REA there were windmills with large cisterns to store water, a pressure tank is a just in time water system. Garden’s take time, they take two people or a family, one to raise the garden and one to can the crop. In my youth my grandmother who lived with us helped out in the garden, she helped with canning, we ate off that garden to a partial degree, for meat, chickens there was my grandmother’s farm. It as a team effort even in the 1950’s. There will not be much time for the internet.

    Course of action: purchase some shovels while they are on sale at Menard’s. Plant more fruit trees, fence more area off for a garden – animals need to eat as well. of their portion is the last week of saved food prior to the next harvest, that could be a long week. This could be a hell of a challenge,choosing an appropriate pronoun while important to some might become secondary to most; society might change considerably.

    Dennis L.

    • It takes pallets of hauled in feed on the farm just to make a living for a family, even doing it the confined way yet with bio dynamic / perma-culture practices. And the work load is not that bad.

      It takes lot of years and space to have few/no input family sustenance farm, lets say it takes 5-15yrs before “serious output” appears and that is obviously not compatible with the current public demand to be satisfied, your surplus is adequate for local swaps at best..

      • Dennis L. says:

        Your ideas are probably better than mine, perma culture is a mystery to me.
        5-15 years on the garden seems about right, it is a great deal of work, at least for this city slicker.

        My original idea was to swap the crop through rent for essentials, essentially the formal economy, I had something real as the result of my land producing. Unfortunately that was $6 corn, it is now $2. Basically the goal was to be in the primary economy not the tertiary one.

        There don’t seem to be many areas which produce a surplus, dentistry had great margins, I still have a license; it seems difficult to avoid catching the virus and subsequent death or disability, think I shall stay retired.

        Challenging times, thanks for the input, it is appreciated.

        Dennis L.

        • john Eardley says:

          Permaculture is far more productive than annuals with almost zero inputs required after the initial growth phase. My friend had a single red currant bush in the garden which produced 60 lbs of fruit each year; it had however taken 35 years of tending to reach such a productive peak. I have four ten foot (20 year old) fruit trees in the garden which I am hoping to get at least 100bottles of wine off this summer with minimal effort.

          • Yep, it’s a bit like massaging the curve now for distant future benefit..
            We can help jump start the original bio-diverse abundance and productivity but it takes time for these systems to mature for aggregate productive yield. And in the meantime it should not be bulldozed over, dumped over with trash and toxic waste, set a blaze or cut down by marauders. Not an easy task in itself (while living among other humanoids)..
            The time factor is usually against our perception.

            Funny, you mention the humble currant bushes, they can get really old, fond memories of people long gone tending them..

    • Xabier says:

      Certainly in England in the 1920’s and 30’s – a terrible time for all farmers – owners of farmland found it very hard to find soild tenants for them.

      Many went to wrack and ruin, untrimmed hedges grew over lanes and roads making tunnels, weeds invaded huge areas, etc.

      Must have been quite nice for the wild creatures, though – as we see now, as with reduced human activity they are freer and bolder.

    • Canning requires supplies as well. We cannot count on those supplies being available.

      The historic solution is grains, but they are hard to grow and process. Insects like them too.

      • john Eardley says:

        If you had to grow one crop to live off it would be potatoes. The only essential ingredient they don’t have is protein.

        • DJ says:

          You could live on only potatoes, they are about 10% protein by calories, complete but low quality. Add small amount of peas or beans or ANY animal protein and you’re good to go.

          Potatoes, peas, a hen or two ..

        • Xabier says:

          And take an Irish cookery course, to learn a hundred and one delicious ways in which to serve them!

        • Herbie R Ficklestein says:

          And hopefully the potatoe blight does not reappear as in Ireland!
          At my church there is a erected statue to acknowledge the crisis and immigration of those fleeing to the US over the seas.
          In the Andes the native people’s developed many varieties and strains to overcome such events.
          A very good book is titled Shatterring by Cary Fowler

          From the Inside Flap
          It was through control of the shattering of wild seeds that humans first domesticated plants. Now control over those very plants threatens to shatter the world’s food supply, as loss of genetic diversity sets the stage for widespread hunger. Large-scale agriculture has come to favor uniformity in food crops. More than 7,000 U.S. apple varieties once grew in American orchards; 6,000 of them are no longer available. Every broccoli variety offered through seed catalogs in 1900 has now disappeared. As the international genetics supply industry absorbs seed companies–with nearly one thousand takeovers since 1970–this trend toward uniformity seems likely to continue; and as third world agriculture is brought in line with international business interests, the gene pools of humanity’s most basic foods are threatened. The consequences are more than culinary. Without the genetic diversity from which farmers traditionally breed for resistance to diseases, crops are more susceptible to the spread of pestilence. Tragedies like the Irish Potato Famine may be thought of today as ancient history; yet the U.S. corn blight of 1970 shows that technologically based agribusiness is a breeding ground for disaster. “Shattering” reviews the development of genetic diversity over 10,000 years of human agriculture, then exposes its loss in our lifetime at the hands of political and economic forces. The possibility of crisis is real; this book shows that it may not be too late to avert it.
          https://www.amazon.com/Shattering-Food-Politics-Genetic-Diversity/dp/0816511810

          That is why they built that seed savers vault in the Artic.
          A lot that is going to be for the bottleneck survivors….we really have no idea what we all will be up against

  5. Harry McGibbs says:

    “As more than half the people in the world hunker down under some form of enforced confinement, stirrings of political and social unrest are pointing to a new, potentially turbulent phase in the global effort to stem the coronavirus pandemic…

    “…it is the world’s poorer nations, which can’t afford subsidies for those who lose jobs, that are most vulnerable to heightened unrest, said Cátia Batista, professor of economics at Lisbon’s Nova University. More than 2 billion people worldwide depend on daywork to survive, according to the International Labor Organization, and for many of them, not working often means not eating.”

    https://www.msn.com/en-us/news/world/stirrings-of-unrest-around-the-world-could-portend-turmoil-as-economies-collapse/ar-BB12SXro?fbclid=IwAR2-zyMtdEKNR7l4C6KzBbfkcjvMSKQwlDetS6xQfz8MmNKhWwivA58O7p4

    • Harry McGibbs says:

      “Investors have pushed back on pleas by the G20 group of big economies to allow emerging economies to pause their debt repayments…”

      https://www.ft.com/content/4b9266ad-df46-454c-b31f-40b6b7c70fbb

    • Dennis L. says:

      Harry,
      A guess with regards to subsidies. There is a post below regarding food, economists assume an apple, abstract apples are difficult to eat. Food has a very short, understandable production chain, it requires people, it is perishable, it is JIT from harvest to harvest. Subsidies will not produce an apple.

      There is a smugness in the west regarding much of our society, a clever policy will make perfection. If this virus weakens us, it will affect out ability to work, produce. Purchasing inputs will not be the limiting factor, people who know how to use those inputs could well be.

      Much discussion here is in the abstract, I read most comments, ignore most but there are hints that one can consider which may help some have a tomorrow without sitting on a box of beans with a shotgun and thinking one is prepared.

      Personally, I think FE got it wrong with his storage container, he needs a family, he needs friends who are close, yelling at people, calling them stupid leaves one alone. Food is a group project, this damn virus is weakening us, even the healthy need others, surviving the virus does little good without an intact food chain.

      Dennis L.

      • Right! “Surviving the virus does little good without an intact food chain.”

        It is incredibly difficult for a single person or family to provide this, even if their home has solar panels with some backup batteries. Solar panels do not help much at all with providing food to put on the table. Solar panels can perhaps boil water, but somehow the person or family must find fresh water as well. If some mishap occurs (broken leg, infected tooth, reaction to insect sting), the person must somehow work around this problem. If weather doesn’t quite cooperate, the person/family has to have large quantity of nonperishable food available, to tide them over to better weather. Insects will likely want to eat this food as well, adding to the challenge.

      • Nope.avi says:

        This is not a FE this a “diverse ” rich society problem.
        Everyone has their version of yelling at people and calling them stupid.

        Family and friends are not made equal. Not everyone in a social circle is productive or useful for doing hard work. There are people perfectly content with staying under lockdown for the rest of their lives. Anyone who has come from a dysfunctional family knows that a dysfunctional family is sometimes being the same thing as being alone.

        In the past, simpler societies routinely purged themselves of people who weren’t useful or were unusually disagreeable.

        The people yelling at people and calling them stupid.
        are calling attention to social problems, even if they are the problem. And let’s be thankful, that for now, it has not escalated to violent persecution.

        I don’t see how surrounding yourself with people who are clueless about what needs to be done or you don’t get along with helps things. We need less diversity and more agreement and people who get along very well to move forward in a social context.

        • It takes a lot of energy for an economy to tolerate a lot of diversity. The US has tolerated more diversity than most, because of its high energy consumption. We have been able to have specialized schools for hearing impaired children, blind children, and those who are slow academically. There are classes for those with behavior disorders, as well. Employers can be ordered to build ramps so that anyone using a wheel chair will not have difficulty getting in.

          When China had little energy supply, and even now, it has had much more of a culture of “not being too different” from everyone else. There has been more of an emphasis on rote memorization. There doesn’t seem to be much extra funds spent on catering to those who are different. I never noticed a ramp for wheel chairs, at the University I was at, for example.

          Europe has tried to hold down inequality, but it has run into problems trying to integrate large numbers of immigrants from the Middle East and Africa to its culture. There is just too much disparity.

      • Craig says:

        I like the phrase “food is a group project”. The groups are getting smaller.

    • I expect that the world’s poorer nations will also have a much elevated death rate from many causes, because poor people are not eating well.

  6. Lee Chambers says:

    Hi Gail,

    What is your position on debt forgiveness? A debt that can’t be repaid won’t be repaid, the only question is how we don’t pay these huge debts created by the banks. Could a debt jubilee help resolve the problem?

    • I think that many of the “assets” bought with debt will have essentially no value. For example, the value of advanced academic degrees will disappear. The value of toll roads will disappear. The value of big stadiums will disappear. The value of big houses, far from sources of food will disappear. Roads will be in very poor repair, and there will be rules against travel, so travel by car won’t make sense, whether in a vehicle powered by electricity or gasoline. Replacement parts for these vehicles, such as replacement tires, won’t be available either.

      Under those circumstances, the debt will be uncollectible. Those depending on the future value of this debt (for example, insurance companies, banks, and pension plans) will discover that the hoped value of the future payments really isn’t there. The issue can be described as a need for debt forgiveness. It can also be described as a lack of collectability.

  7. Yoshua says:

    No, Sars-Cov-2 does not contain HIV genetic code.

    https://www.europeanscientist.com/en/big-data/no-sars-cov-2-does-not-contain-hiv-genetic-code/

    Whether Sars-Cov-2 was made in a lab or by nature, it still seems to have similarities with HIV.

    Sars-Cov-2 is perhaps not as lethal as HIV, but it’s a lot more contagious.

    The virus is still airborne HIV.

    • Fast Eddy says:

      Oh wow… so I can catch AIDS from breathing the air of a Wuhan sufferer? Oh man — I am really really scared now… LOCK ER DOWN!!!!

      Time to Cower

      • Yoshua says:

        No, but you can catch COVID-19.

        There are some similarities between Sars-Cov-2 and HIV, but they are not the same.

        • Fast Eddy says:

          The problem here is … I have caught the MSM lying multiple times…. so forgive me if I suggest that this is just plain BS…

          The real kicker was when Fauci (who far ts out of his armpit)…. said Wuhan can be transmitted without showing symptoms —OOOOH AAAAAHHHH….. went the world…. but then FE went to the CDC site and found in big bold letters that ALL flu can be transmitted without symptoms

          https://www.cdc.gov/flu/about/disease/spread.htm

          Wuhan is a brand of flu.

  8. Fast Eddy says:

    8 big choppers inbound from the North Sea to Aberdeen… hmmm….

    https://www.flightradar24.com/56.07,-1.02/6

    • Not easy to cap the wells for such large shut down? Panic mission on its way, so extra special crew needed or just regular rotation of personnel to/from the rigs?

      As you know there are entire teams of people purchasing sat data on deployment of machinery and analyzing whatever related info such as flight lists to gauge (verify) independently the performance in the energy biz.

    • The big platforms on which workers live and work no doubt provide recirculated air to the entire group. This is sort of like the big cruise ships. It is a great way to pass COVID-19 around.

  9. el mar says:

    Hallo FE,

    you are not the only Wolf-basher!

    Bill Sodomsky
    April 17, 2020 at 3:03 pm
    Hi Steve,
    With oil now firmly below the $20 mark and for those of us in Canada, roughly $3-4 per barrel, I think it’s time for an updated Triangle of Doom Graphic with your usual insightful commentary.
    With all of the guff I have taken over the past decade warning about the inevitable Energy Deflation factor, the current oil predicament does give me a certain degree of solace even though the outcome is horrifying. The German’s refer to that disposition as “schadenfreude.”
    I will never forget how the “Wolf” Richter tore a strip off of you some years back when you commneted on his site the prospect of energy deflation. He said deflation was a rarity and inferred in his usual arrogance that you were full of “SH#*T. You calmy replied something to the effect, “wait and see.” I wish I could find the commentary.
    Anyways, nothing is more gratifying than being right, especially when it takes a decade to play out.
    https://www.economic-undertow.com/2020/04/10/the-numbers-game/#comments

    Saludos

    el mar

    • Fast Eddy says:

      I recall Wolf suggesting that we’d be just fine with no population growth — I disputed that – he mocked me – then I dropped a few studies including one from Yale demonstrating that 1/3 of all growth was attributed to population growth.

      He deleted that.

      In early March I suggested the virus issue was going to collapse the global economy… he again mocked me with ‘sky is not falling’ and insisted in that in a couple of months after the recession things would normalize.

      Each time he pumps out a grim article I pop on and say ‘not to worry this will all be fine in a couple of months’

      He of course does not publish those comments

      Wolf Richter is a total a s s ho le. I would enjoy saying that to his face.

      • HDUK says:

        Well his own mug, ‘Nothing goes to heck in a straight line’ is wrong. May be he is the mug. Unlike Nate Hagens (ex Wall Street) who can see beyond pure money printing and supply and demand price rises, Wolf appears totally wedded to it. He had a pop at Gail in his comments section, he just can’t seem to get the big picture in his head. He is not a systems thinker, we need more system thinkers. What he writes is good however for building your ‘own’ big picture. Macro Voices helps with the big picture. A recent interview with Art and Nate was really good although a bit dated already, things are moving sooooo fast now, its hard to keep up.
        https://www.macrovoices.com/
        Harry and Gail thank you, you are a must read re the big picture and many others here.

    • Formulation of “Triangle of doom” analysis in the public space made a lot of laymen by-standing (with “St. Patience”) doomer people very wealthy in 2016 and especially now Q1 2020, as prior similar rupturing cycles were mostly insider info only, however it’s always an inner fight knowing – acknowledging it’s ultimately at the expense of the future vast majority of brutally impoverished ones, so lets not be cocky about it in the wrong way (I’m not saying you guys are).. and eventually share some if possible and feasible..

  10. Harry McGibbs says:

    “Japan’s trade surplus dived 99 percent in March from a year earlier as coronavirus woes hit exports to its major trading partners, official data showed Monday.”

    https://www.japantimes.co.jp/news/2020/04/20/business/economy-business/japan-trade-surplus-dives-99-march-coronavirus-hits-exports/#.Xp1TxchKjIU

  11. Harry McGibbs says:

    “Crazy, dangerous things have taken root in policy circles. Traditional norms are being tossed on the compost heap.

    “COVID-19 is the catalyst for the bursting of history’s greatest global bubble. And no amount of fiscal and monetary stimulus will immunize the U.S. economy from the unfolding economic downturn.”

    https://seekingalpha.com/article/4338375-weekly-commentary-crazy-dangerous-things

    • Harry McGibbs says:

      “Americans are traditionally the world’s consumers of last resort. But that’s about to change.

      “Even when what the IMF is calling the Great Lockdown ends and we emerge from the immediate coronavirus crisis, the economic ramifications of this moment will produce a new age of US austerity.”

      https://www.ft.com/content/8b2370be-8092-11ea-8fdb-7ec06edeef84

      • Harry McGibbs says:

        “Food banks face going millions of dollars over budget as they struggle to meet surging demand from those hit hard by mass layoffs caused by the coronavirus pandemic.

        “Across the US, not-for-profit groups are buying truckloads of increasingly expensive food to cope with the sharp increase in the “new needy” – and the dramatic decline in donations from supermarkets left empty by panic shoppers.”

        https://www.theguardian.com/us-news/2020/apr/17/us-food-banks-over-budget-demand-coronavirus

        • Even private citizens who want to contribute to food banks discover their efforts blocked, because grocery stores increasingly have fairly bare shelves, with signs up such as “Limit 2,” or “Buy only what you need.” The inexpensive non-perishable goods that people want are especially in short supply in supermarkets.

          • Xabier says:

            Very true here in the UK: I can buy online almost unlimited chocolate bars, snackes, wine, cakes, meat, vegetables, and so on, but am now limited to just 1 bag of flour, packet of yeast, 3 cans of baked beans, chickpeas, etc.

            Impossible to stockpile such non-perishables unless a really dedicated and solitary -no family to gobble it all up – shopper buying to the limit several times a week.

            • JesseJames says:

              My gosh, limited baked beans….whatever are you Brits going to do for breakfast?

          • the concept of a food shop, open to everyone, every day and all day, with shelves never empty or items ‘missing’ is only about a century old.

            but a century is four generations which means there is no one alive who can remember things otherwise.

            so we collectively slide into a state of unsaid denial. that shops could ever be empty of all we need

            It is beyond the horizon of our imagination, and thus our ‘beliefs’

            i can’t be the only doomster to have noticed that as ‘events’ slide into history, so the denial of fact and logic rises to say they never were, or could not be.

            so now we think of the wondrous foodmarket as part of our established existence. I think we are in for a nasty shock. And as the riots kick off because the food isn’t there, it will all be part of the denial of our current reality, that we have been living in a single and unique century of plenty.

            but the mobs will still scream ‘conspiracy’ on it, just like they do for everything else that demands imagination to accept as truth

            • Since you almost correctly applied the (3rd)4th turning concept I’ll kindly provide you with a hint, some social structures demonstrably and on purpose fought this “short sided” dynamic, i.e. trying to overcome via much longer span of time in preserving knowledge and control schemes. Religious institutions being one example, and private societies-clans with tightly knit know-how on trade&commerce and gov-public sphere interference techniques being the other..

              Evidently in both cases able to traverse centuries, not intact, not exactly same influence and power, but endured. Are they going to everlast over to next inter-glacial? Not likely.., just deflecting potential outburst of silliness, but hopefully the initial point of discussion will get across.

            • JesseJames says:

              Not only are we of plenty guilty of thinking that food will magically always be available, but we also have invented preposterous rights such as, the right to unlimited health care, and other extravagances such as gender studies departments at universities, free government benefits for everyone, etc.

  12. Harry McGibbs says:

    “Riots have broken out in Paris amid anger over police ‘heavy-handed’ treatment of ethnic minorities during the coronavirus lockdown. Police used tear gas and baton charges in Villeneuve-la-Garenne, northern Paris, in the early hours this morning as fireworks exploded in the street.”

    https://www.dailymail.co.uk/news/article-8235307/Riots-break-suburbs-Paris-amid-anger-French-police-heavy-handedness-lockdown.html

    • Harry McGibbs says:

      “More than a quarter of all jobs in Europe could be impacted by the economic fallout of the coronavirus pandemic, according to an analysis from McKinsey.

      “The consultancy estimated that up to 59 million jobs are at risk of things like reduced working hours, temporary furloughs or permanent job losses.”

      https://www.politico.com/news/2020/04/19/quarter-of-europes-jobs-at-risk-from-coronavirus-crisis-195465

      • Harry McGibbs says:

        “When northern Europeans discuss eurobonds or similar instruments, they frame the debate in terms of solidarity and charity or, in the Dutch case, as a gift. They do not see it as risk insurance. There is zero appreciation in Germany, and, I suppose, the Netherlands too, of a potentially catastrophic downside to their financial sectors and their economies were Italy to default.

        “Yet, a default becomes increasingly probable if politics rules out alternatives. If or when that happens, the eurozone will not be ready.”

        http://archive.vn/DBo8K#selection-1893.0-1903.135

        • Xabier says:

          Too comfortable and prosperous for too long, and a pronounced tendency to smugness, makes the rich North of Europe both blinkered and patronising.

    • Not enough to go around = someone gets left out.

  13. Harry McGibbs says:

    “The global coronavirus pandemic threatens to cause a huge shock to international food trade and trigger a new food crisis, a top agriculture official in China said on Monday.

    “The comments came as coronavirus outbreaks roiled global agriculture supply chains and upended trade, and after some countries restricted exports of main grains and increased procurement for reserves.”

    https://uk.reuters.com/article/uk-china-agriculture/coronavirus-threatens-to-trigger-new-round-of-global-food-crisis-china-official-idUKKBN222047?il=0

    • Harry McGibbs says:

      ^^^Curious. Reuters altered their story to omit the Chinese official’s talk of a global food crisis. Hopefully this one will keep working:

      “”The fast-spreading global epidemic has brought huge uncertainty on international agriculture trade and markets,” said Yu Kangzhen, China’s deputy agriculture minister.

      “”If the epidemic continues to spread and escalate, the impact on international food trade and production will definitely worsen, and might trigger a new round of food crisis,” Yu said during a video conference on the country’s agriculture outlook.”

      https://www.dailysabah.com/world/covid-19-threatens-to-trigger-new-round-of-global-food-crisis-chinese-official-says/news?fbclid=IwAR3tskDqLxwWznjvFZTO17i-03SD_KbvnBt9J-BLcG2hUQ11TABl6NY1mEQ

      • Harry McGibbs says:

        “Human Rights Watch (HRW) warned earlier this month that unless a robust aid programme is established, millions of Lebanese may go hungry. This in a country of more than six million, of which some 1.5 million are Syrian and Palestinian refugees.

        “But programmes take time, and the government is running out of it…”

        https://www.aljazeera.com/ajimpact/war-hunger-grows-lebanon-anger-200417222253896.html

        • Harry McGibbs says:

          “Around the world the coronavirus pandemic has brutally exposed economic vulnerabilities. For wealthy but parched states in the Gulf, it’s resurrecting deep concerns over food…

          “…as the virus disrupts global supply chains, desert nations like the United Arab Emirates that import as much as 90% of the food… are treating the issue as a matter of national security.

          https://www.bloombergquint.com/politics/pandemic-expats-and-ramadan-stress-test-food-security-in-gulf

          • I expect that food will be a major problem in the Gulf. If the price for oil is not adequate, there is a question of what to trade for food, assuming others are exporting it, and the full supply chain is available.

            • the saudis have convinced themselves that the world will always want to trade food for oil.

              and have adjusted their gold plated lifestyles accordingly.
              their towers in the desert, vast airports and air conditioned football stadiums are entirely based on that single premise.

              now we’ve reached the situation where the balance has changed, and the trade is oil for food

              the saudis are not entirely stupid (above excesses notwithstanding) and the situation is now frighteningly clear: If no one wants the only product you have to sell, then poverty is certain, And trying to put 28m people back into desert that could barely support 1 million a century ago is making collapse and starvation certain

              Especially since even the odd 1 million won’t have a clue how to support themselves in real desert conditions.

              So that means total collapse, as the kingdom is overrun by external forces, who themselves are in a equal state of denial over the real value of oil. The American fleet will sail away from Bahrain, because the only reason for them to be there will have evaporated.
              The carnage will continue until the combatants figure out there’s nothing to fight over.

        • If there is not enough to go around, who gets left out? I would expect that refugees would be pretty far back in the line for getting available food.

      • Interesting that China is talking about uncertainty of world agriculture. Thanks for the new link.

    • Fast Eddy says:

      An estimated 2,500 people rallied at the Washington state capitol in Olympia to protest Democratic Governor Jay Inslee’s stay-at-home order, defying a ban on gatherings of 50 or more people.

      In Denver, hundreds of people gathered at the state capitol to demand the end to Colorado’s shutdown. As protesters clogged streets with cars, healthcare workers in scrubs and face masks stood at intersections in counterprotest.

      https://uk.reuters.com/article/uk-health-coronavirus-usa/more-u-s-protests-call-for-lifting-coronavirus-restrictions-as-governors-push-back-idUKKBN2210MK

      If these numbers are not lies then the CDP is going great guns. 99.99999999% of Americans have bought into the FEAR … if this miniscule rabble brings the ruckus… a few will be arrested … if necessary some will be shot …. the masses will blow kisses to the heroes who shoot these disease spreaders ….

      And we will continue to wait until The Starvation Phase arrives….

      https://media.tenor.com/images/ab36a8d44b7a84c28a7ef9e4851758ce/tenor.gif

    • Xabier says:

      Restriction on food exports (and pharmaceuticals, medical equipment, etc) have come in very rapidly indeed – and this is without bad harvests, so far.

      Governments which complacently assume that all such basic needs can always be readily imported -eg the UK – should take note.

      Humanity is not one, there will be no disinterested sharing of scarce resources -why should there be? Revolution and chaos are the inevitable fruit of starvation,and all governments will do anything to avoid that.

    • Each country does the same think at individual families do. They try to set aside more in reserves, when they see that future supply is uncertain.

  14. Fast Eddy says:

    Oh and btw why would the Grade 3 teacher say it will be months before domestic travel can resume?

    How could she possibly know that? And why would she even bother to day that?

    Unless she knows about the CDP — and it was a bit of a slip on her part…

    • Perhaps you should have chosen your place of residence based on (1) the possibility of the local supply chain staying intact for at least a bit, and (2) the political environment favoring the local supply chain staying intact.

      The people who believe that wind turbines and solar panels will save us are precisely the wrong ones to have in power today. They haven’t figured out anything about how the economy really works.

  15. Yoshua says:

    Sars-Cov-2 seems to lead to mild symptoms if your immune system is strong. The T-cells goes on a suicide mission and kills the virus.

    The problem is that you can get infected over and over again. There’s no herd immunity against the virus.

    The virus is airborne HIV.

    Have the governments told us this? No.

    • Yorchichan says:

      Does Sars-Cov-2 lie dormant within the body after “recovery” from an infection, ready to multiply once more when conditions are favourable, or must re-infection occur from an outside source?

      The behaviour of a recovered infectee or governments could obviously depend on the answer to this question (outside source infection only => lockdowns forever).

  16. Fast Eddy says:

    The Government has outlined ten reasons we would be allowed to travel domestically under Alert Level 3, but it could still be months before general domestic travel resumes.

    https://www.stuff.co.nz/travel/news/121055312/new-rules-when-can-i-travel-around-new-zealand

    Obviously international is not going to be revived any time soon.

    The global economy is done. Just waiting for the funeral announcement now.

    • doomphd says:

      in places like Hawaii, a way of life has changed. only most don’t know it yet.

      • Hawaii has been terribly dependent on the travel industry. Also, the US military base. People on the Big Island expect to fly to Honolulu for some kinds of medical care, such as having a baby.

        Before fossil fuels, I understand that a major type of travel was in small boats around the edge of the island. People lived along streams going up the sides of mountains. There was no source of metals, so a civilization was built without metals. It would seem like the Hawaiian Islands would at some point need to go back to something similar, with much smaller population. There is easy to gather food, so at least some population could be supported.

  17. Marco Bruciati says:

    WTI 14 dollars

  18. Jarvis says:

    On Vancouver island, home to 900,000 people, we’ve been in hand washing mode for 2 months and social distancing for about 5 weeks. Our center for disease control just published the following stats: 7 people in hospital, 2 in critical care, 0 new cases reported, total number of deaths 3 with the average age being 87. Just to be safe we handed complete control of our country over to a few doctors who, bless their hearts, saved us from a rampaging virus but destroyed our economy.
    I’ve no idea what a wrecked economic will cost in lives but to start take the above numbers and times that by 1000?

    • Fast Eddy says:

      Odd…. people in NYC are washing their hands and doing what you guys are doing….

      • doomphd says:

        it may be a people density problem. the crowded living conditions in NYC work in favor of the virus, despite the measures they are taking. it’s simply not enough.

        • Fast Eddy says:

          Ya… I’ve heard that… the problem is I lived in Hong Kong for two decades… and I have been to NYC….. and NYC is sparsely populated compared to HK….

          I have also been to northern Italy… and it’s even more sparsely populated than NYC…

          So WTF?

          • doomphd says:

            maybe personal hygiene, or lack thereof. just telling folks to sneeze into their arms or wash their hands regularly doesn’t translate into proper hygiene overnight. i suspect that those living in HK or Singapore know how to do it correctly. i don’t know about Northern Italy. Rome and Naples seemed pretty clean to me.

            when I last visited Singapore, they had some pretty stiff punishments for spitting on the sidewalks. (and they were “caning” folks for graffiti and using the death penalty on foreigners accused of dealing in marijuana). compare that with typical street people’s behavior in major American cities like NYC and SF.

            • Fast Eddy says:

              Singapore is indeed extremely clean …. yet they have (we are told by the MSM) epic numbers of infections…. far more than HK ….

          • doomphd says:

            i have a reply caught in moderation, i think.

        • interguru says:

          “it may be a people density problem”
          New York has a density of at 27,000 people/sq-mile counting Staten Island Three (relatively) successful COVID control programs were put in place in Seoul S. Korea,42,000/sq mi, Hong Kong (17,552.3/sq mi)and Singapore (20,212/sq mi). Think of another reason. (All numbers from Wikipedia.)

          • doomphd says:

            the short answer within my moderated earlier reply to FE is variable personal hygiene in these densely populated cities. call it a cultural factor.

            • Fast Eddy says:

              If you look at HK Island and Kowloon only … strip out the new territories and outlying islands (most of the islands have no residents and much of HK outside is designated parkland… and they are massive — 44,000 hectares vs 345H for central park) HK is far more densely populated than any city in the US ….

              Maybe the difference is that everyone in HK is wearing a mask when they leave their homes….

              As far as I can see that is the only difference.

              And Ardern says to cough and sneeze into your sleeve…. yep – we are gonna go months without domestic travel — but we shouldn’t bother with masks…

              Maybe we should defecate on the street? The jury is out on if that would be a good or bad thing… so just go ahead… dump wherever you feel like….

              Fauci says to fart from your armpit instead of your ar se…..

              Trust me – this is not Idio cracy — this is the CDP.

          • I thought that population density was an issue too, but I am not as certain. Masks may be a big offset to population density.

            When I look at information about the State of Georgia, the incidence of COVID-19 is highest in the Albany area. This is far from Atlanta; much more rural with a higher percentage of black population. I understand part of the problem has been senior care centers.

  19. Fast Eddy says:

    I am festering a little here… not so much over The Grade 3 Teacher’s little speech — she is following the CDP so that was expected….

    More over the inability of people to ‘get it’…

    Let’s break this down for the non-VIP members (yes non VIPS can read this post if they want…)

    1. We are told washing our hands is the best way to not catch the flu (including the Wuhan Flu)

    2. Why should we wash our hands? Of course that’s because when people who have the flu sneeze or cough their spew spreads onto things like door knobs, elevator buttons, railings etc…. then we touch those things then our mouths or noses — and the virus gets into our bodies.

    3. How do you wash your hands when you are out and about (e.g. in the supermarket)? Even though we want to stop putting our hands on our faces that is VERY difficult to do…

    4. How could we avoid touching our faces? It’s rather obvious isn’t it — cover your face with some sort of mask or scarf.

    5. Why did Ardern not recommend or better still INSIST that all NZers cover their faces when out of the home?

    6. Is this Idiocracy? She may be a Grade 3 Teacher but even that is a long way from Idiocracy. She has a LOT of people advising who KNOW that a face covering will stop a virus.

    7. Jacinda says ‘cough or sneeze into your sleeve’

    Come the Fack on …. we are still going to be mostly shut down — rather extreme… surely she could go the extra yard and at least recommend them.

    Nope – that’s not part of the CDP.

    • doomphd says:

      NZ has always been about 15-20 years behind the times. when i visited Christchurch in the late 1970s, they were still playing mid-60s Beatles hits on the radio. and those were not “oldies” stations. maybe they’ve caught up some by now.

      how did a 3rd grade school teacher become PM?

  20. Fast Eddy says:

    Further to my comment re NZ moving to Level 3 — ‘stay home’ — that as the first thing the Grade 3 Teacher said when the rules for Level 3 was announced…

    Oh wash your hands – cough and sneeze into your elbow… hmmmm… no recommendation for masks…. bizarre?

    • Masks would be a great idea.

      • Fast Eddy says:

        HK > ZERO infections yesterday.

        Keep in mind HK has not forced anyone to wear masks — the people figured that masks are good on their own…

        How amazing the G3T is not aware of the success HK has had – nope ‘cough and sneeze into your elblow’……

        This would be a great scene for the upcoming I diocracy 2.0…. in this scene the people have the flu and they are coughing and sneezing into their elbows… and wondering why the flu keeps spreading like crazy….

        Leon the new king is asked what to do and he says…. wear masks….

        The thing is … this is not a movie … virologists KNOW masks are a good idea…. G3T knows they are a good idea — all leaders KNOW they are a good idea…

        Think about that….

  21. Fast Eddy says:

    NZ reduces to Level 3 next Monday ‘we have locked in our gains’ (um … sorry but that’s not the way it works with a virus…. the virus is still there…. so you either lock down forever or the virus begins to spread again…)

    Then two weeks after that they will again decide what to do

    Anyone want to bet that cases spike and NZ heads back to Level 4 in May?

    That would be a very grim announcement —- I can see the Grade 3 teacher with a very serious look on her face for that one….. her loins will be girded…. as we double down on the fear….

    • Ed says:

      Yes FE, it irritates me to no end this idea of slowing new cases equals reducing number of deaths. No CV19 is patient, if not this week then next week, if not this year then next year.

    • Watch for when international flights out are available. NZ doesn’t sound like long-term paradise.

      • Fast Eddy says:

        If domestic flights are months away then international flights are surely further out than that…. domestic flights will no doubt restart some time after we get to 0 infections (which is not likely anytime soon because many people will have the flu but not get tested…)

        There are some outbound flights operating … AirNZ/CX code share flies to Hong Kong ….

        I assume that is mostly cargo though because you a) must be a permanent resident of HK to get on board b) you have to quarantine in HK for two weeks (of course that’s not forced …. because of course this is not important enough to force people to quarantine) and c) if you do not live in Auckland then you cannot get to Auckland for the flight because domestic travel is not permitted.

  22. Covidinamonthorayearoradecade says:

    https://www.politico.eu/article/coronavirus-russia-vladimir-putin-keeps-low-profile/

    Putin hides from the virus…

    “Dmitry Peskov, the Kremlin spokesman, said this week that hospitals were experiencing a “huge influx” of coronavirus patients. Videos posted on social media at the weekend showed massive lines of ambulances waiting to deliver patients to a hospital near Moscow. One ambulance driver said he had queued for 15 hours.”

    as Moscow enters its surge…

    • Oh my! The Kaiser Permanent office I use has a big tent outside, presumably to keep suspected COVID-19 patients away from other patients.

      I think the issue hospitals is having is the need to try to keep COVID-19 patients away from other patients. They end up being served by a subset of the total number of physicians and other staff available.

      Hospitals look empty, because patients are staying away, since it is not really possible to tell which patients (with a heart attack, stroke or broken leg) also has COVID-19, perhaps without symptoms. Patients tend to stay away. Health care is mostly delivered over the telephone.

  23. Covidinamonthorayearoradecade says:

    https://www.marketwatch.com/story/the-next-45-days-are-the-most-critical-period-in-us-financial-history-says-stock-market-expert-who-profited-in-1987-and-2008-crises-2020-04-15

    “Even if we execute properly, the recovery will take time and a best-case scenario is a ‘U’ shaped recovery,” he wrote. “The much talked about ‘V’ shaped recovery is no longer in the equation because of the unprecedented combination of negatives with this crisis,” he said, referring to hope for a recovery that is sharp and fast.

    hopeless optimist thinks there could be a U shaped recovery…

    the next 45 days are huge indeed…

    by June, perhaps a majority of the public will realize that the economy is toast and that a Greater Depression is upon us and will be permanent…

    • Dennis L. says:

      Not a doomer, always an optimist, but reading in Zerohedge experiences of those who have had “mild” cases and the long recovery period, there are many things I am not going to do for a longer period of time that the powers that be would like. It would seem logical that there will be many changed habits gong forward.

      What a mess.

      Dennis L.

    • Thanks, interesting article.
      And by the ~2032 the little IceAge peak will bite us in the neck..

    • Slow Paul says:

      There will probably be a L-shaped recovery.

  24. Fast Eddy says:

    OH WOW! In addition to eating your brain Covid can cause you to have your body parts amputated!!!!!

    https://www.stuff.co.nz/entertainment/celebrities/121113839/coronavirus-broadway-star-nick-cordero-faces-leg-amputation-due-to-virus

    • All of this scares people. In fact, I don’t really blame them for being frightened. Big medical bills and ongoing problems for life are in many ways worse than dying from COVID-19. Loss of wages for an extended period, especially if no one can figure out when a person is really infectious, is another issue.

  25. CTG says:

    WTI at $15.54. Brent will catch the bid down soon. At this rate, we are going, it will be less than $10 by end of this week….

    • Covidinamonthorayearoradecade says:

      “by the end of this week” is indeed a bold prediction…

      who was that guy who said oil prices would soon be negative?

      • Covidinamonthorayearoradecade says:

        $15.27…

        dropping like a rock…

        perhaps OPEC+ will meet tomorrow (ha ha sarc)…

    • Joebanana says:

      My province. Guy dressed up as a cop and had done up a car to look just like an actual police vehicle. Sure as hell must have put some thought into it. He was at large for hours.

  26. CTG says:

    WTI will drop faster as it is the price of oil at Cushing Oklahoma. It is landlock and storage is fixed. Brent has seaborne outlet.

    The Hin Leong debacle may force Brent to drop quite a bit if the storage is not accessible due to bankruptcy.

    The interesting thing is – there is no one cockroach. We may very well see banks and trading firms like Glencore distrusting each other due to counter-party issues. Since this is outside of USA, the Feds may have a problem in helping these companies directly. They can do it the indirect way (via USD swaps or SPVs) but then there will be hundreds of these blowing up from now on since the floodgate is already opened.

    • Good analysis.
      If they rescue this one it would be $70-150T (global aggregate effort not only FED) in rear view mirror – seems impossible as of now, but perhaps manageable after-all. Last time, the GFC, was supposedly bellow $20T when all said and done.

  27. Fast Eddy says:

    Plenty of space for concubines!

    https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12326015

    Oh look there’s me mate Graeme!!!

    https://www.nzherald.co.nz/resizer/-Gr3gxi32BLzcp8u7helx3sSPZM=/620×413/smart/filters:quality(70)/arc-anglerfish-syd-prod-nzme.s3.amazonaws.com/public/U5Q7FHGNAVCBTH2HHQGE6SUZMQ.jpg

    Who is this dip sh it?

    Though not in a mansion, Dinulescu has no plans to return to the Valley until the pandemic recedes. He is now holed up on Waiheke Island with his wife in a two-floor, three-bedroom house with ocean views for $2400/month—more than a third less than what they were paying for their two-bedroom apartment in San Francisco.

    The couple chose Waiheke, with a population of about 9000, for the proximity to its other elite residents. Dubbed “the Hamptons of New Zealand,” the island is home to epic cliff-top mansions and world-class wineries. Sir Graham Henry, former coach of the All Blacks, owns a home there, as does the packaging tycoon Graeme Hart.

    “Frankly, we were billionaire hunting,” Dinulescu said. “We wanted to figure out where all the other Silicon Valley people would be.” So far, he said he hasn’t rubbed shoulders with any tech elite: “Everyone has been in self-isolation.”

    Maybe he is looking for a gardening job to pay the $2400 rent?

  28. CTG says:

    Do read the article in its entirety and the comments section is also interesting (no politics). It does have a huge impact on everything. Hin Leong sold pledge collateral and the banks, which are highly levered (possible Singapore banks?) and giant storage tanks in Singapore may not be available for storage anymore. There is a possibility that this may be the revered snowflake?? No one can be sure but one of straw to the back of the camel.

    Asian Oil Trading Legend Files For Bankruptcy After Hiding $800 Million In Losses, Secretly Selling Loan Collateral

    https://www.zerohedge.com/commodities/singapore-oil-trading-giant-files-bankruptcy-after-hiding-800-million-losses-secretly

  29. Fast Eddy says:

    Well I don’t know where they come from
    But they sure do come
    I hope they comin’ for me
    And I don’t know how they do it but they sure do it good
    I hope they doin’ it for free

    They give me Lockdown fever
    Lockdown fever….

    https://www.stuff.co.nz/national/121121474/machetewielding-man-dies-after-being-shot-by-police-in-papatoetoe-south-auckland

  30. CTG says:

    WTI @ $16.99…

    • Covidinamonthorayearoradecade says:

      $15.51… !!!!!!!

      how low can it go?

      I am guessing single digit $ in May…

      that is not a very bold prediction…

      • timl2k11 says:

        The current contract (May) expires Tuesday. I suspect it is cratering because of storage problems. The June contract is at $23.73.

  31. Ed says:

    I think Cuomo forgot in his rush to kill Trump in November that Manhattan without tourists will be smaller poorer, duller, and pay far fewer taxes. No Broadway, no opera, no ballet, no Statue of Liberty visits, no museums, no restaurants, no in person universities(?), no large scale hospitals(?).

    Vacation in NYC the covid center of the world. More disease infested than a Calcutta slum. Buy a country house in NY State covid center of the world. Not to worry we lock down everyone forever. Come pay taxes and stay in your house.

    • Tim Groves says:

      Cuomo and Trump—it looks like there’s a plague on both their houses.

    • Cuomo categorically and specifically denied candidacy for now, but perhaps he could be asked pretty please at the Dem convention in summer. Still not likely as Epsteiny-Malarkey Joe with any survivable youngish VP mate pick is a better-safer option for them..

  32. beidawei says:

    FE says: “There does not have to be 5000 comments on each OFW article…. most of the comments are responses to the Grade 3 class…. if nobody rebuts then they are encouraged to post more rubbish because they believe they are brilliant…”

    me: It is entirely possible for two people to each feel this way about the other. I like the prolific posters whose posts consist mainly of news links, though.

    FE: “I am not suggesting censorship — what I am suggesting is a second OFW…. call it VIP OFW [….] The only way to get into the VIP room is you have to pass a 10 question test…. (e.g. has man ever been out of low orbit… was nine11 a false flag and if so what was the purpose) … FE volunteers to create the test…..”

    me: Something like a Left-OFW and Right-OFW, then? Message boards / fora typically have diverse comment threads meant to accommodate the diversity of interests. This is harder to achieve with a comment section, but at 5000 comments per blogpost, perhaps a shift in format would be in order. I have no interest in crashing FE’s VIP room, though.

    Hey, FE! Aren’t you people celebrating your founder’s birthday today?

    • Fast Eddy says:

      This is a perfect example of what I was talking about…..

    • Covidinamonthorayearoradecade says:

      thank you, biedawei…

    • as i’ve tried to point out before 99% of FEs utterances are no more than attention seeking. It follows the same pattern as Korean Kim’s generals who stand around with notebooks writing down everything he says, because it is a matter of life and death.

      Which to them it is of course.
      While the rest of the world falls about laughing the generals are not in a position to see the joke.

      keep that in mind, and everything else drops into humorous place

    • I agree regarding, “The great price collapse of 2020 will topple companies and transform states.”

      Of course, it won’t transform states in a good way.

      He quotes quite a few people, including me. He got the problem right, but I am not an accountant.

      We haven’t run out of oil. Instead, we have run out of demand for oil at high enough prices to smoothly run the petro-economy. This is tied to “excessive wage and wealth disparity,” notes the accountant Gail Tverberg.

  33. JMS says:

    “The head of the WHO was the 3rd most powerful person in the TPLF, a Communist Revolutionary Party in Ethiopia that was listed as a terrorist organization in the 90s and, as a political arm of a minority ethnic group (6%), reportedly conducted systematic discrimination and human rights abuses against the majority ethnic group. So odd that the MSM would neglect to mention this. I thought they hated racial discrimination, ethnic persecution and human rights abuses?
    https://www.theburningplatform.com/2020/04/04/the-crimes-of-tedros-adhanom/

  34. JMS says:

    And by the way, who is WHO’s Tedros?
    Tedros Adhanom Ghebreyesus was voted WHO Director-General in 2017 replacing the controversial Dr Margaret Chan of Hong Kong. He is the first African to head the health agency and the first one not a medical doctor. He has a BA degree in biology at the University of Asmara in Eritrea. He then served in a junior position, at the Ministry of Health under the Marxist dictatorship of Mengistu. After the fall of Mengistu in 1991 Tedros went to the UK and took a Doctorate of Philosophy (PhD) in Community Health from the University of Nottingham in 2000, with a doctoral dissertation on “The effects of dams on malaria transmission in Tigray Region, northern Ethiopia.”
    He then went on to become Minister of Health from 2005 to 2012 under Prime Minister Meles Zenawi. There he met former President Bill Clinton and began a close collaboration with Clinton and the Clinton Foundation and its Clinton HIV/AIDS Initiative (CHAI). He also developed a close relation with the Bill and Melinda Gates Foundation. As health minister, Tedros would also chair the Global Fund to Fight AIDS, Tuberculosis and Malaria that was co-founded by the Gates Foundation. The Global Fund has been riddled with fraud and corruption scandals.
    Today the largest donors to the WHO are the Gates Foundation and its associated GAVI Alliance for vaccination. With backers like Gates and Clinton it was no surprise that Tedros went on, after a stint as Ethiopian Foreign Minister, to win the post of WHO Director-General, this despite being the first non-physician to hold the position. During Tedros’ three year campaign to win the WHO post he was charged with having covered up three major epidemics of cholera while health minister in Ethiopia, mislabeling the cases as “acute watery diarrhea” (AWD)—a symptom of cholera—in an attempt to play down the significance of the epidemics, charges he denied.

    https://www.globalresearch.ca/who-who-tedros-adhanom/5704110
    https://www.nytimes.com/2017/05/13/health/candidate-who-director-general-ethiopia-cholera-outbreaks.html

    • So he knows the right people.

    • Fast Eddy says:

      I think he was on Springer once…. from I could gather he’d hooked up with a mistress who was actually a tranny freeeek….. his wife was really upset with him because he was planning to divorce her…. then the TF unveiled herself (quite the dongle on her btw…. goat-like)….. the wife launched herself on the TF — the security guards had to come out and separate them….

      Tedros just sat their through the entire incident with a happy smile on his face…

    • There is a big difference however:

      But there was one major difference between Sars-CoV-2 and HIV, according to the new study.

      HIV can replicate in the T cells and turn them into factories to generate more copies to infect other cells.

      But Lu and Jiang did not observe any growth of the coronavirus after it entered the T-cells, suggesting that the virus and T-cells might end up dying together.

      • Dennis L. says:

        Gail,
        It is difficult to have good idea without being very competent in virology. The guy who won a Nobel for HIV seems to think the virus was made in a lab, seems like a reasonable assumption to me especially in light of the bat story.

        Having a virus with RNA that in some parts is identical with parts of HIV, same with malaria, same with conoravirus seems a bit of a stretch. Throw in anti malarial drugs seemingly being effective and it is a large number of coincidences.

        The virus does seem to be very selective in whom it targets.

        I don’t have a clue, the thing is a PIA and has made a mess out of civilization. Reading history, we have done some wonderful things these last 100 years or so, it wasn’t easy.

        Dennis L.

        • From where we sit, it certainly does look to be lab-produced. Unfortunately, there were other countries involved, as well, and we really can’t do anything about the result now. According to one article we saw, the US has been doing some recent funding because of concern that China was not doing a good enough job of keeping its viruses contained in the lab.

          • Fast Eddy says:

            Someone just shared a video slamming the CCP over their Wuhan coverup….

            My response — the rest of the world didn’t response very seriously even though they were aware that ‘the killer virus’ was on the loose in Wuhan….

            Did they immediately stop all flights from China even though they KNEW millions were outbound for CNYr? Nope.

            Did they stop all air travel knowing full well that infected people would be inbound from other countries. Nope

            Did they – do they – force people to wear masks in public. Mostly nope.

            Do their experts claim they are uncertain if masks are helpful? For the most part yep.

            How anyone cannot believe this flu is just another flu – that (given its timing) it was released on purpose and is being used to nuke the global economy with stimulus so it can stay afloat awhile longer and to create FEAR to reduce suffering when this sucker goes south… is beyond me.

            It’s so obvious.

            The virus was welcome like a returning championship winning world cup football team…. it was given the keys to cities across the world

    • Fast Eddy says:

      It eats the brain, liver and kidneys… and destroys the heart …. blood also spurts from the eyeballs in the latter stages….

      And, according to CBS, there are now isolated cases of people exhibiting ‘small pox’ like symptoms

      http://4.bp.blogspot.com/_u5Z9XsAvLkI/TPcN2WmVKlI/AAAAAAAAAEM/BLoqcTTDLf4/s1600/SmallpoxvictimIllinois1912.jpg

  35. Z says:

    https://twitter.com/FKTVis/status/1251412600551866373

    Here is a good thread from former Russian Military Intelligence explaining what is going on….

    • I think that this conclusion is exactly right:

      DANIEL ESTULIN: 90% OF BUSINESSES WILL FAIL. 90% OF PEOPLE WON’T HAVE A JOB.

      We’ve only seen twice in the history of mankind, when the old Roman order collapsed and then when feudalism died and capitalism came about – this is the end of a system.

      I have my doubts about the specific Bill Gates-forced vaccination allegations and other allegations on the thread.

    • Ed says:

      Without fossil fuels it will NOT be robots and AI. Maybe after a massive die off over a few hundred years (99%) followed by a slow techno rise over a few hundred years then maybe robots and AI.

  36. Chrome Mags says:

    https://nypost.com/2020/04/17/more-have-been-infected-with-coronavirus-than-believed-study/

    ‘Antibody study suggests coronavirus rate much higher than previously believed’

    “Many more people may have been infected by the coronavirus than previously believed, a new study shows. A recent study tested the blood of 3,300 volunteers in Santa Clara County, Calif., and found that between 2.5 and 4 percent of them had the antibodies that show they’ve recovered from COVID-19. In a county the size of Santa Clara, where the population numbers 2 million, that rate of infection would mean between 48,000 and 81,000 people have fought off the virus — far more than the 1,000 who have officially tested positive there.”

    “Our findings suggest that there is somewhere between 50- and 80-fold more infections in our county than what’s known by the number of cases than are reported by our department of public health,” Dr. Eran Bendavid, the associate professor of medicine at Stanford University who led the study, said in an interview with ABC News.”

    It would seem that from this study the virus has infected a lot more people that previously thought, and that many can handle the virus with no symptoms. I think this is a positive development because it shows the virus cannot be stopped no matter what we do to avoid it and that most people’s immune systems are up to the job of holding off symptoms, especially life threatening one’s. On the other hand, it also shows the virus has the ability to spread much faster due to the high number of stealth carriers.

    Maybe this is going to end up being like Logan’s Run X2. In Logan’s Run people were eliminated at 30, but it would seem the virus mostly goes after those over 60. Maybe it should be known as ‘Logan’s X2 Corona’.

    • Yet more evidence that a lot more people have been infected than have been counted.

      • Chrome Mags says:

        “Yet more evidence that a lot more people have been infected than have been counted.”

        “A recent study tested the blood of 3,300 volunteers in Santa Clara County, Calif., and found that between 2.5 and 4 percent of them had the antibodies that show they’ve recovered from COVID-19.”

        Yes, Gail, and if we use an average percentile of 3.25% x 7.5 billion people, the total number infected so far is ~243,750,000. Two hundred forty three million… That’s a heck of a lot of people!!!

    • Robert Firth says:

      Ah, Logan’s Run: good trashy SF flick. In the book, the age of termination was 21; the movie raised it to 30. But I still think the TV series better, with the excellently underdressed Heather Menzies as Jessica.

      • Chrome Mags says:

        “But I still think the TV series better”

        I’ll ck. it out as I haven’t seen before. Sounds like good pandemic viewing.

      • Duncan Idaho says:

        I agree.
        Never saw the TV series, as I have never owned a TV.

    • Yep, something like ~30-50-80x ratio of real infections vs. tested (depending on the region) seems plausible..

  37. Koreans not giving a shit about masks

    https://www.youtube.com/watch?v=nTLFChLKw8U

    A drunken guy kicks a Bentley Continental. Only half of the crowd, not giving a shit about social distancing, are wearing masks.

  38. info says:

    I fear debt cancellation wholesale and replacing it wholesale with debt free currency may be required.

    Or at least all private debt should be monetized and the loan cancelled.

    • don’t quite follow

    • Nope.avi says:

      info, how’ is what you are proposing any different than letting businesses default their loans?
      The results of default and a debt jubilee, in today’s world are similar, to me. After the debt cancellations, I mean defaults, no lender their right mind is going to lend lots of money to someone with an unproven track record,

      The government will have to take the role of managing the entire economy.

      Right now, the majority of the federal subsidies set aside for “small businesses” ,in the U.S. , for economic relief due to the virus is going to large businesses and people who have personal relationships with Washington politicians.

      https://www.orlandosentinel.com/coronavirus/jobs-economy/os-ne-coronavirus-large-companies-get-small-business-loans-20200415-gonpormpjzgjve6jquazs6f6ci-story.html

      https://www.denverpost.com/2020/04/02/coronavirus-stimulus-aid-small-business-big-chains/

      https://nypost.com/2020/04/17/potbellys-ruths-chris-snag-coronavirus-loans-meant-for-small-business/

      The economists are right about human emotions and habits affecting the market economy. If everyone is pessimistic about the future, there is a low likelihood they are going to want to support anything aside from very basic goods and services. It’s uncertain what will prevent corruption and politics from depriving the producers of essential goods and services of capital.

      • info says:

        @Nope.avi

        “info, how’ is what you are proposing any different than letting businesses default their loans?
        The results of default and a debt jubilee, in today’s world are similar, to me. After the debt cancellations, I mean defaults, no lender their right mind is going to lend lots of money to someone with an unproven track record,”

        We have no choice. Either that or unsustainable unpayable debt.

    • Robert Firth says:

      Moderator, please kill. System goofed again.

    • “Debt free currency” – is that like petroleum free electricity?

      • Robert Firth says:

        Debt free currency is what the US Constitution mandated (Art I sect 8), namely, gold and silver.
        However, I think we need to make that a bit stronger: “Neither the General Government, nor the Government of any State or Territory, shall issue debt upon its own Faith and Credit, but only on the Security of tangible Assets independently valued.”

        • Dennis L. says:

          Robert,

          Assets depreciate, when the economy was growing precious metals couldn’t grow as quickly, it seems to be a problem of turnover in money, old problem of banks lending long and borrowing short.

          What we have a is a mess, there is an old sardine joke you are most likely familiar with.Seems the trick is to have title to something of value and be able to defend it. Sound familiar? You have traveled and I am sure noticed castles were ideally on hills and the windows well suited to launch arrows, etc.

          The economy is probably contracting faster than gold now, central banks trying to hide it. Assets are costs unless they produce income.

          All the best,

          Dennis L.

          • Robert Firth says:

            Thank you, Dennis. Yes, the conventional wisdom is that the supply of gold could not keep pace with the economy, but history seems to say otherwise. The great increase in the economies of the West was in the late 18th and most of the 19th century, with a hard gold standard. The main reason countries abandoned the gold standard was the Great War, which occurred at a time when several countries were facing economic contraction. Not helped by the US, which capitalised on the conflict by running a huge trade surplus. Until they realised that the belligerents would be unable to pay, and joined the war at the last minute to ensure the Entente would win. After that, things get murky, as a new breed of economists began to teach that debt led to growth. And here we are.

  39. In case someone missed it, we still have an ongoing oil crisis. The latest problem out of the North Sea. The combination of an oil glut and prices being driven down by the China/Russia spat are threatening North Sea oil. Current prices bring operations into a shutdown. Currently more rigs idle than at any time, and cap slashed. https://www.ft.com/content/b20fb4a5-648f-4196-9378-1d908b085488

  40. Harry McGibbs says:

    “Commodity traders are hunting for extra space to store their crude as demand for oil collapses by 29m barrels per day in April compared with last year, falling to lows not seen since 1995.

    “The traders are understood to be storing the excess crude [in supertankers] in the hope it can be sold at a profit when demand for transport fuels returns later this year.”

    https://www.theguardian.com/business/2020/apr/19/supertankers-drafted-in-to-store-glut-of-crude-oil-coronavirus

  41. JMS says:

    “The so-called “Spanish flu” was “a much more dangerous virus, but it traveled by boat – it took much longer to transmit” than the new coronavirus, which causes Covid-19 disease. For researcher Maria Manuel Mota, director of the Instituto de Medicina Molecular, “it is important for people not to panic: this is a relatively kind virus“: it is necessary to protect the elderly, but in her “personal opinion”, it is not possible to “stagnate” the lives of the youngest.
    In an interview with the weekly Expresso, the researcher who leads the laboratory that created the “made in Portugal” tests (which are already being produced by 11 national institutions), defends that this is a virus that “wants to live and adapts itself to live with us. And we will have to adapt to live with it”. One thing is certain: “it is not the first, it will not be the last, we constantly have viruses in our lives. This is more problematic than some and less than others. The ability to spread in a global world was extraordinary ”.
    https://observador.pt/2020/04/18/nao-entrem-em-panico-virus-e-relativamente-bonzinho-diz-maria-manuel-mota-diretora-do-imm/

    • JMS says:

      Then we have our moaronic health minister saying that “Until the discovery of the vaccine, the expectation of returning to normality will always have to be moderated by measures of restriction, containment and prevention that we cannot, as far as we know, completely eliminate” ,
      Hearing this I think is this minister stoopid (economically illiterate) or is she just saying what she is told? Because defending such barbarity is of course the same as defend the economic apocalypse for everybody, a complete insanity.
      https://jornaleconomico.sapo.pt/noticias/medidas-de-contencao-serao-necessarias-ate-haver-vacina-afirma-marta-temido-575217

      • Xabier says:

        It will be very much a case of ‘Operation successful, but sadly the patient died.’

      • Slow Paul says:

        It is hard to understand that this collapses the entire economy when you still have a well paid job and don’t feel the despair, hunger and hopelessness as the less fortunate do.

        I don’t think there will be a vaccine but it is politically hazardous to put economics up against potential deaths. So they are going to drag this thing out until they realize that the damage and deaths from economic collapse far outnumber corona deaths.

      • Fast Eddy says:

        Obviously they understand that lockdown collapses the economy — yet they admit lockdowns must continue…..

        CDP.

    • I would agree. We have to adapt to live with this virus. That is the only thing that can possibly work. But we probably will have to give up our current economy to adapt.

      • Ed says:

        Give up our “current economy” yes. Maintain 8 billion humans no. Only question how far down and how fast? I expect it will be a large step down in the end, over many many years. Well beyond my life span ~30 years or less.

Comments are closed.