Understanding Our Pandemic – Economy Predicament

The world’s number one problem today is that the world’s population is too large for its resource base. Some people have called this situation overshoot. The world economy is ripe for a major change, such as the current pandemic, to bring the situation into balance. The change doesn’t necessarily come from the coronavirus itself. Instead, it is likely to come from the whole chain reaction that has been started by the coronavirus and the response of governments around the world to the coronavirus.

Let me explain more about what is happening.

[1] The world economy is reaching Limits to Growth, as described in the book with a similar title.

One way of seeing the predicament we are in is the modeling of resource consumption and population growth described in the 1972 book, The Limits to Growth, by Donella Meadows et al. Its base scenario seems to suggest that the world will reach limits about now. Chart 1 shows the base forecast from that book, together with a line I added giving my impression of where the economy really was in 2019, relative to resource availability.

Figure 1. Base scenario from 1972 Limits to Growth, printed using today’s graphics by Charles Hall and John Day in “Revisiting Limits to Growth After Peak Oil,” with dotted line added corresponding to where the world economy seems to be in 2019.

In 2019, the world economy seemed to be very close to starting a downhill trajectory. Now, it appears to me that we have reached the turning point and are on our way down. The pandemic is the catalyst for this change to a downward trend. It certainly is not the whole cause of the change. If the underlying dynamics had not been in place, the impact of the virus would likely have been much less.

The 1972 model leaves out two important parts of the economy that probably make the downhill trajectory steeper than shown in Figure 1. First, the model leaves out debt and, in fact, the whole financial system. After the 2008 crisis, many people strongly suspected that the financial system would play an important role as we reach the limits of a finite world because debt defaults are likely to disturb the worldwide financial system.

The model also leaves out humans’ continual battle with pathogens. The problem with pathogens becomes greater as world population becomes denser, facilitating transmission. The problem also becomes greater as a larger share of the population becomes more susceptible, either because they are elderly or because they have underlying health conditions that have been hidden by an increasingly complex and expensive medical system.

As a result, we cannot really believe the part of Figure 1 that is after 2020. The future downslopes of population, industrial production per capita, and food per capita all seem likely to be steeper than shown on the chart because both the debt and pathogen problems are likely to increase the speed at which the economy declines.

[2] It is far more than the population that has overshot limits.

The issue isn’t simply that there are too many people relative to resources. The world seems to have

  • Too many shopping malls and stores
  • Too many businesses of all kinds, with many not very profitable for their owners
  • Governments with too extensive programs, which taxpayers cannot really afford
  • Too much debt
  • An unaffordable amount of pension promises
  • Too low interest rates
  • Too many people with low wages or no wages at all
  • Too expensive a healthcare system
  • Too expensive an educational system

The world economy needs to shrink back in many ways at once, simultaneously, to manage within its resource limits. It is not clear how much of an economy (or multiple smaller economies) will be left after this shrinkage occurs.

[3] The economy is in many ways like the human body. In physics terms, both are dissipative structures. They are both self-organizing systems powered by energy (food for humans; a mixture of energy products including oil, coal, natural gas, burned biomass and electricity for the economy).

The human body will try to fix minor problems. For example, if someone’s hand is cut, blood will tend to clot to prevent too much blood loss, and skin will tend to grow to substitute for the missing skin. Similarly, if businesses in an area disappear because of a tornado, the prior owners will either tend to rebuild them or new businesses will tend to come in to replace them, as long as adequate resources are available.

In both systems, there is a point beyond which problems cannot be fixed, however. We know that many people die in car accidents if injuries are too serious, for example. Similarly, the world economy may “collapse” if conditions deviate too far from what is necessary for economic growth to continue. In fact, at this point, the world economy may be so close to the edge with respect to resources, particularly energy resources, that even a minor pandemic could push the world economy into a permanent cycle of contraction.

[4] World governments are in a poor position to fix the current resource and pandemic crisis.

In our networked economy, too low a resource base relative to population manifests itself in a strange way: It appears as an affordability crisis that leads to very low prices for oil. It also appears as terribly low prices for many other commodities, including copper, lithium, coal and even wholesale electricity. These low prices occur because too large a share of the population cannot afford finished goods, such as cars and homes, made with these commodities. Recent shutdowns have suddenly increased the number of people with low income or no income, pushing commodity prices even lower.

If resources were more plentiful and very inexpensive to produce, as they were 50 or 70 years ago, wages of workers could be much higher, relative to the cost of resources. Factory workers would be able to afford to buy vehicles, for example, and thus help keep the demand for automobiles up. If we look more deeply into this, we find that energy resources of many kinds (fossil fuel energy, nuclear energy, burned biomass and other renewable energy) must be extraordinarily cheap and abundant to keep the system growing. Without “surplus energy” from many sources, which grows with population, the whole system tends to collapse.

World governments cannot print resources. What they can print is debt. Debt can be viewed as a promise of future goods and services, whether or not it is reasonable to believe that these future goods and services will actually materialize, given resource constraints.

We are finding that using shutdowns to solve COVID-19 problems causes a huge amount of economic damage. The cost of mitigating this damage seems to be unreasonably high. For example, in the United States, antibody studies suggest that roughly 5% of the population has been infected with COVID-19. The total number of deaths associated with this 5% infection level is perhaps 100,000, assuming that reported deaths to date (about 80,000) need to be increased somewhat, to match the approximately 5% of the population that has, knowingly or unknowingly, already experienced the infection.

If we estimate that the mean number of years of life lost is 13 years per person, then the total years of life lost would be about 1,300,000. If we estimate that the US treasury needed to borrow $3 trillion dollars to mitigate this damage, the cost per year of life lost is $3 trillion divided by 1.3 million, or $2.3 million per year of life lost. This amount is utterly absurd.

This approach is clearly not something the United States can scale up, as the share of the population affected by COVID-19 relentlessly rises from 5% to something like 70% or 80%, in the absence of a vaccine. We have no choice but to use a different approach.

[5] COVID-19 would have the least impact on the world economy if people could pay little attention to the pandemic and just “let it run.” Of course, even without mitigation attempts, COVID-19 might bring the world economy down, given the distressed level of today’s economy and the shutdowns experienced to date.

Shutting down an economy has a huge adverse impact on that economy because quite a few workers who are in good health are no longer able to make goods and services. As a result, they have no wages, so their “demand” goes way down. If the economy was already having an affordability crisis for goods made with commodities, shutting down the economy tends to greatly add to the affordability crisis. Prices of commodities tend to fall even lower than they were before the crisis.

Back in 1957-1958, the Asian pandemic, which also started in China, hit the world. The number of deaths was up in the range of the current pandemic, relative to population. The estimated worldwide death rate was 0.67%.  This is not too dissimilar from a death rate of 0.61% for COVID-19, which can be calculated using my estimate above (100,000 deaths relative to 5% of the US population of 33o million).

Virtually nothing was shut down in the US for the 1957-58 pandemic. When doctors or nurses became sick themselves, wards were simply closed. Would-be patients were told to stay at home and take aspirin, unless a severe case developed. With this approach, the US still faced a short recession, but the economy was soon growing again. Populations seemed to reach herd immunity quite quickly.

If the world could somehow have adopted a similar approach this time, there still would have been some adverse impact on the economy. A small percentage of the population would have died. Some businesses might have needed to be closed for a short time when too many workers were out sick. But the huge burden of job loss by a substantial share of the economy could have been avoided. The economy would have had at least a small chance of rebounding quickly.

[6] The virus that causes COVID-19 looks a great deal like a laboratory cross between SARS and HIV, making the likelihood of a quick vaccine low.

In fact, Professor Luc Montagnier, co-discoverer of the AIDS virus and winner of a Nobel Prize in Medicine, claims that the new coronavirus is the result of an attempt to manufacture a vaccine against the AIDS virus. He believes that the accidental release of this virus is what is causing today’s pandemic.

If COVID-19 were simply another influenza virus, similar to many we have seen, then getting a vaccine that would work passably well would be a relatively easy exercise. At least one of the vaccine trials that have been started could be reasonably expected to work, and a solution would not be far away.

Unfortunately, SARS and HIV are fairly different from influenza viruses. We have never found a vaccine for either one. If a person has had SARS once, and is later exposed to a slightly mutated version of SARS, the symptoms of the second infection seem to be worse than the first. This characteristic interferes with finding a suitable vaccine. We don’t know whether the virus causing COVID-19 will have a similar characteristic.

We know that scientists from a number of countries have been working on so-called “gain of function” experiments with viruses. These very risky experiments are aimed at making viruses either more virulent, or more transmissible, or both. In fact, experiments were going on in Wuhan, in two different laboratories, with viruses that seem to be not too different from the virus causing COVID-19.

We don’t know for certain whether there was an accident that caused the release of one of these gain of function viruses in Wuhan. We do know, however, that China has been doing a lot of cover-up activity to deter others from finding out what actually happened in Wuhan.

We also know that Dr. Fauci, a well-known COVID-19 advisor, had his hand in this Chinese research activity. Fauci’s organization, the National Institute for Allergy and Infectious Diseases, provided partial funding for the gain of function experiments on bat coronaviruses in Wuhan. While the intent of the experiments seems to have been for the good of mankind, it would seem that Dr. Fauci’s judgment erred in the direction of allowing too much risk for the world’s population.

[7] We are probably kidding ourselves about ever being able to contain the virus that causes COVID-19. 

We are gradually learning that the virus causing COVID-19 is easily spread, even by people who do not show any symptoms of the disease. The virus can spread long distances through the air. Tests to see if people are ill tend to produce a lot of false negatives; because of this, it is close to impossible to know whether a particular person has the illness or not.

China is finding that it cannot really contain the virus that causes COVID-19. A recent South China Morning Post article indicates that roughly 14 million people are to be tested in the Wuhan area in the next ten days to try to control a new outbreak of the virus.

It is becoming clear, as well, that even within China, the lockdowns have had a very negative impact on the economy. The Wall Street Journal reports, China Economic Data Indicate V-Shaped Recovery Is Unlikely. Supply chains were broken; wholesale commodity prices (excluding food) have tended to fall. Joblessness is increasingly a problem.

[8] If we look at deaths per million by country, it is difficult to see that lockdowns are very helpful in reducing the spread of disease. Masks seem to be more beneficial.

If we compare death rates for mask-wearing East Asian countries to death rates elsewhere, we see that death rates in mask-wearing East Asian countries are dramatically lower.

Figure 2. Death rates per million population of selected countries with long-term exposure to the virus causing COVID-19, based on Johns Hopkins death data as of May 11, 2020.

Looking at the chart, a person almost wonders whether lockdowns are a response to requests from citizens to “do something” in response to an already evident surge in cases. The countries known for their severe lockdowns are at the top of the chart, not the bottom.

In fact, a preprint academic paper by Thomas Meunier is titled, “Full lockdown policies in Western Europe countries have no evident impacts on the COVID-19 epidemic.” The abstract says, “Comparing the trajectory of the epidemic before and after the lockdown, we find no evidence of any discontinuity in the growth rate, doubling time, or reproduction number trends.  .  . We also show that neighboring countries applying less restrictive social distancing measures (as opposed to police-enforced home containment) experience a very similar time evolution of the epidemic.”

It appears to me that lockdowns have been popular with governments around the world for a whole host of reasons that have little to do with the spread of COVID-19:

  • Lockdowns give an excuse for closing borders to visitors and goods from outside. This was a direction in which many countries were already headed, in an attempt to raise the wages of local workers.
  • Lockdowns can be used to hide the fact that factories need to be closed because of breaks in supply lines elsewhere in the world.
  • Many countries have been faced with governmental protests because of low wages compared to the prices of basic services. Lockdowns tend to keep protesters inside.
  • Lockdowns give the appearance of protecting the elderly. Since there are many elderly voters, politicians need to court these voters.

[9] A person wonders whether Dr. Fauci and members of the World Health Organization are influenced by the wishes of vaccine and big pharmaceutical companies.

The recommendation to try to “flatten the curve” is, in part, an attempt to give vaccine and pharmaceutical makers more time to work on their products. Is this really the best recommendation? Perhaps I am being overly suspicious, but we recently have been dealing with an opioid epidemic which was encouraged by manufacturers of Oxycontin and other opioids. We don’t need another similar experience, this time sponsored by vaccine and other pharmaceutical makers.

The temptation of researchers is to choose solutions that would be best from the point of their own business interests. If a researcher gets much of his funding from vaccine and big pharmaceutical interests, the temptation will be to “push” solutions that are beneficial to these interests. In some cases, researchers are able to patent approaches, even when the research is paid for by governmental grants. In this case they can directly benefit from a new vaccine or drug.

When potential solutions are discussed by Dr. Fauci and the World Health Organization, no one brings up improving people’s immunity so that they can better fight off the novel coronavirus. Few bring up masks. Instead, we keep being warned about “opening up too soon.” In a way, this sounds like, “Please leave us lots of customers who might be willing to pay a high price for our vaccine.”

[10] One way the combination of (a) the activity of the virus and (b) our responses to the virus may play out is as a slow-motion, controlled demolition of the world economy. 

I think of what we are experiencing as being somewhat similar to a toggle bolt going around and around, moving down a screw. As the toggle bolt moves around, I picture it as being similar to the virus and our responses to the viruses hitting different parts of the world economy.

Figure 3. Image of how the author sees COVID-19 as being able to hit the economy multiple times, in multiple ways, as its impact keeps impacting different parts of the world.

If we look back, the virus and reactions to the virus first hit China. China’s recovery is moving slowly, in part because of reduced demand from outside of China now that the virus is hitting other parts of the world. In fact, additional layoffs occurred after Chinese shutdowns ended, because it then became clear that some employers needed to permanently scale back operations to meet the new lower demand for their product.

Commodity prices, including oil prices, are now depressed because of low demand around the world. These low prices can be expected to gradually lead to closures of wells and mines extracting these commodities. Processing centers will also close, making these commodities less available even if demand temporarily rises.

As one country is hit by illnesses and/or shutdowns, we can expect supply lines for manufacturing around the world to be disrupted. This will lead to yet more business closures, some of them permanent. Debt defaults tend to happen as businesses close and layoffs occur.

With all of the layoffs, governments will find that their tax collections are lower. The resulting governmental funding issues can be expected to lead to new rounds of layoffs.

Natural disasters such as hurricanes, tornadoes, floods, earthquakes and forest fires can be expected to continue to happen. Social distancing requirements, inadequate tax revenue and broken supply lines will make mitigation of all of these disasters more difficult. Electrical lines that fall down may stay down permanently; bridges that are damaged may never be repaired.

Initially, rich countries can be expected to try to help as many laid-off workers as possible with loans and temporary stipends. But, after a few months, even with this approach, many individual citizens and businesses will likely not be able to pay their rent. Default rates on home mortgages and auto loans can be expected to rise for a similar reason.

We can expect to see round after round of business failures and layoffs of employees. Financial systems will become more and more stressed. Pensions are likely to default. Death rates will rise, in part from epidemics of various kinds and in part from growing problems with starvation. In fact, in some poor countries, lower-income citizens are already having difficulty being able to afford adequate food. Eventually we can expect collapsing governments (similar to the collapse of the central government of the Soviet Union) and overthrown governments.

Longer-term, after this demolition ends, there may be some surviving pieces of economies. These new economies will be much smaller and less dependent upon each other, however. Currencies are likely to be less interchangeable. The remaining people will need to learn to make do with many fewer goods than are available today. It will be a very different world.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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2,995 Responses to Understanding Our Pandemic – Economy Predicament

  1. Minority Of One says:

    This video just got posted to my YT recommendations.
    Looks like a public relations effort from the Controlled / Uncontrolled Demolition team.

    Aftermath: Population Zero – The World without Humans

    • Harry McGibbs says:

      “Poor neighbourhoods in the Chilean capital Santiago have seen a resurgence in the use of community kitchens once prevalent in the darkest days of dictatorship, as coronavirus shutdowns put pressure on jobs and send thousands into poverty.”


      • Harry McGibbs says:

        Minority of One, I have somehow responded to your video, which was not my intention.

        “The coronavirus pandemic, c li m at e chaos and locust swarms have exacerbated the food crisis in Africa, which is already home to millions of food-insecure people.”


        • Harry McGibbs says:

          “Singapore’s obsession with food goes far deeper than its world-famous chili crab and laksa.

          “One of the most densely populated countries on the planet, its 5.7 million people rely on other nations for almost everything they eat. Just 0.9% of its land area of about 700 square kilometers was classified as agricultural in 2016, only marginally more than icebound Greenland.

          “Now, as countries around the world confront the prospect of food demand that’s forecast to rise by more than half by 2050, Singapore finds itself at the vanguard of work to keep a swelling population fed while also addressing land constraints and the threat of c lim a te change…

          “Years of contingency planning -– and recent moves to maintain the key flow of goods from neighboring Malaysia –- have helped keep supplies arriving through pandemic-related disruptions, even as Singapore experienced waves of panic buying that emptied some supermarket shelves of food.”


          • SomeoneInAsia says:

            Good to know S’pore’s govt is working hard to keep the island fed, though one is apt to wonder just how much longer we S’poreans can stay afloat as the global economic order unravels…

          • Minority Of One says:

            >> that’s forecast to rise by more than half by 2050

            They must mean by ten to nine.

          • Robert Firth says:

            I wonder whether the author has ever samples that “famous” chili crab and laksa? The crab at best is no match for the crabs of Hokkaido, and in many cases it will be stale. Singapore asian restaurants seem to enjoy seeding dishes with stale seafood and then doubling the price. And laksa is perhaps one of the most unhealthy dishes ever invented. Loaded with excess salt and sugar, and cooked in too much of the cheapest oil on the market. If you want good food in Singapore stick with Thai or Japanese.

            • Fast Eddy says:

              I have been to nearly 60 countries in my 54 years – it’s a toss up between Singapore and Dubai as the worst places on earth.

              I’ve been to Ethiopia — and to be honest — I’d rather live there than in either of the above.

            • Robert Firth says:

              For Fast Eddy: I think in terms of overall quality of life, including of course the friendliness and honesty of the people, the best place I have visited is Belize.

            • Fast Eddy says:

              Which place do you reckon has the hottest babes? Jakarta clubs are pretty off the charts… Bangkok as a crossroads for some many cultures has great genetics…

    • SomeoneInAsia says:

      I feel a bit uncomfortable with how sharply antagonistic humankind and (nonhuman!) Nature are set up against each other in this video. Superb video otherwise, though. As compelling as any horror movie and a whole lot more educational than all the Hollywood fare thrown at us today. I sat through the whole thing; haven’t been gripped so firmly by any movie or TV show for a very long time now. Thanks so much for sharing.

    • Xabier says:

      Excellent; film; although one must observe that ‘dying a horrible death’ is the fate of every animal, Man or no Man to do the killing and poisoning.

      In a briefer time-scale, I saw the forest in the Spanish mountains in the process of reclaiming a speculative housing development started by a member of my family which, I’m glad, to say flopped horribly in the 1990’s.

      It was a satisfying sight. A few crumbling buildings were still rented out, but trees had pushed their way up through the asphalt and the abandoned villas.

      Suggested reading:to go with the film, Lovecraft’s short poem ‘Memory’.

      • Robert Firth says:

        Xabier, “Memory” is a very bad “prose poem”. I think you mean “A Memory”, which is a genuine sonnet. But my preference would be not a poem but a painting, Thomas Cole’s “The Course of Empire” image 5: Desolation. Please look it up, the available images seem (quite illegally) to be flagged as not copyable.

        • Xabier says:

          Good or bad it puts humans in their place,and that’s why I suggested it. Lovecraft is a hoot,

          • Xabier says:

            By the way, how many people died in Malta, is it locked-down -and glad to see that you are well?

            • Robert Firth says:

              Xabier, as of yesterday the death toll is 6. That is out of 609 known cases, so about 1% maximum: since not everyone has been tested the actual % is probably lower.

  2. Harry McGibbs says:

    “The Investopedia Anxiety Index, a measure of our readers’ concerns about market and economic related issues, and the CBOE Volatility Index (VIX), otherwise known as the “Fear Gauge,” have historically been closely correlated…

    “But the last several weeks have revealed a notable divergence between the two as anxiety, especially around personal finance related issues, has spiked, just as markets-based anxiety has subsided. It’s not surprising that has come on the heels of April’s 14% rise in the S&P 500, while some 24 million Americans filed for unemployment.”


  3. john Eardley says:

    Gail, what happened around 1995/6 to turn the velocity of US money negative. This is the graph I saw posted earlier.

    • Sorry, it took me a while to figure this one out.

      1995 was the time when the US dollar was at a minimum relative to other currencies:

      In other words, European currencies were high relative to the US dollar, as was the Yen. All of these countries were doing well. Yet the price of oil was terribly low–too low for US producers to make money extracting the oil. A person would think that having other currencies high, would bring the price of oil up.

      The big thing that happened during this time was the collapse of the Former Soviet Union (FSU). In fact, the decline in the consumption of the FSU took place between 1991 and 1995, ending in 1995-1996. This was a major contributor to the depressed oil prices.

      Inflation adjusted oil prices were near a low point.

      These low oil prices were what allowed Europe and Japan to do well, but it would be impossible to keep getting oil out, without higher oil prices. A change in strategy was needed to get world demand for oil up, not just the US and Europe. In many ways, the world economy was humming along with Bill Clinton as president, but more demand was needed to get oil and other energy prices up.

      January 1, 1995, the World Trade Organization was started. In 1996, the Comprehensive Nuclear Test Ban Treaty was adopted by the UN General Assembly, but has not entered into force. With many countries around the world seeming to do well (excepting oil producers and the former Soviet Union), the Kyoto Protocol was put forth. This gave an excuse for countries to offshore their manufacturing to low-wage countries on the other side of the world, furthering world trade. Because reducing world CO2 emissions sounded like a do-good program, it received a wide range of support.

      Of course, these actions sent world CO2 emissions higher, because there was no way of taxing all of the goods made with high coal emissions from elsewhere in the world. This was the stimulation in demand, outside of the developed world, which had been so much desired, to get oil prices up.

      With the changes in the 1995-1997 period, US federal spending stopped growing. No need for wars. It was other countries around the world that would pull the world economy forward now. Investments in the US could decline, as investments around the world grew. This chart shows the growth in the US budget by year.

      What I would need is a chart showing the split of investment around the world, compared to the US, Europe, and Japan, to show what happened next. While the government kept encouraging more debt, there was really very little productive investment going on in the US, Europe, and Japan after this point. Instead, lower interest rates were leading to asset bubbles. New investment was going into less developed countries, with lower labor costs.

      Without productive investments in the US, there was no place for all of the new debt to go. The velocity of M2 fell and fell, even as the Federal Reserve has tried “pushing on a string,” to encourage new investment.

  4. Tim Groves says:

    For those who have the stamina and interest to read it all, the link below takes you to 44 pages on the Corona Panic, by David Crowe.

    Here’s the opening:

    The world is suffering from a massive delusion based on the belief that a test for RNA is a test for a deadly new virus, a virus that has emerged from wild bats or other animals in China, supported by the western assumption that Chinese people will eat anything that moves.

    If the virus exists, then it should be possible to purify viral particles. From these particles RNA can be extracted and should match the RNA used in this test. Until this is done it is possible that the RNA comes from another source, which could be the cells of the patient, bacteria, fungi, etc. There might be an association with elevated levels of this RNA and illness, but that is not proof that the RNA is from a virus.

    Without purification and characterization of virus particles, it cannot be accepted that an RNA test is proof that a virus is present.

    Definitions of important diseases are surprisingly loose, perhaps embarrassingly so. A couple of symptoms, maybe contact with a previous patient, and a test of unknown accuracy, is all you often need. While the definition of SARS, an earlier coronavirus panic, was self-limiting, the definition of COVID-19 disease is open-ended, allowing the imaginary epidemic to grow.Putting aside the existence of the virus, if the COVID-19 test has a problem with false positives (as all biological tests do) then testing an uninfected population will produce only false-positive tests, and the definition of the disease will allow the epidemic to go on forever.

    This strange new disease, officially named COVID-19, has none of its own symptoms. Fever and cough, previously blamed on uncountable viruses and bacteria, as well as environmental contaminants, are most common, as well as abnormal lung images, despite those being found in healthy people. Yet, despite the fact that only a minority of people tested will test positive (often less than 5%), it is assumed that this disease is easily recognized. If that were truly the case, the majority of people selected for testing by doctors should be positive.

    The COVID-19 test is based on PCR, a DNA manufacturing technique. When used as a test it does not produce a positive/negative result, but simply the number of cycles required to detect sufficient material to beat the arbitrary cutoff between positive and negative. If positive means infected and negative means uninfected, then there are cases of people going from infected to uninfected and back to infected again in a couple of days.

    A lot of people say it is better to be safe than sorry. Better that some people are quarantined who are uninfected than risk a pandemic. But once people test positive, they are likely to be treated with treatments similar to SARS. Doctors faced with what they believe is a deadly virus treat for the future, for anticipated symptoms, not for what they see today. This leads to the use of invasive oxygenation, high-dose corticosteroids, antiviral drugs and more In this case, some populations of those diagnosed (e.g. in China) are older and sicker than the general population and much less able to withstand aggressive treatment. After the SARS panic had subsided, doctors reviewed the evidence, and it showed that these treatments were often ineffective, and all had serious side effects, such as persistent neurologic deficit, joint replacements, scarring, pain and liver disease. As well as higher mortality.

    Click to access CoronavirusPanic.pdf

    • SomeoneInAsia says:

      Haven’t we already enough conflicting claims about the virus, for crying out loud? 😦

      Who’s David Crowe? How many governments have endorsed his claims? How do I know he doesn’t have yet another special axe of his own to grind with respect to his claims about the virus?

      • Xabier says:

        ‘Endorsed by your government’ is hardly ever a recommendation – in fact quite the opposite.

      • Fast Eddy says:

        ‘How many governments have endorsed his claims?’

        If the answer is none – then you might want to read what he says.

        End of the day I have not seen anything even remotely close to being as logical as the CDP. Everything I am seeing points to that as the plan

    • Pintada says:

      Read the first paragraph – total BS

      • Lidia17 says:

        Why do you say that? Also, to “SomeoneInAsia”, since when does gov. endorsement of claims = factuality?

        A friend forwarded an interview with Crowe:
        It’s in the middle hour. You’d be well-served to listen to his description of how PCR testing works. I have a background in biology, and his “claims” make perfect sense to me.

        • Xabier says:

          I’ve noticed that every scientific study of COVID seems to come up with greatly divergent characteristics – the trend now seems to be to say that one can hardly ever catch it at all.

          Which, oddly enough, accords with the current desire of governments to re-open, as their eyes widen in fear at the immense and probably irreparable damage they have caused to economies through the lock-downs.

          • SomeoneInAsia says:

            The damage was already there to begin with. The virus — if it’s for real — was merely extra seasoning.

            The whole thing seems more and more to resemble a real-life version of Kafka’s The Castle. Nothing is what it seems, and you have no way of finding out the truth. For all you know, the virus might have been just a big bogeyman invented by the world’s policymakers secretly collaborating behind our backs. Where’s the Blue Fairy when you need her? Sigh…

            Perhaps this is yet another sociopolitical symptom of the coming collapse. As the whole sucker begins to go down, the panicking policymakers in desperation try to distract the people — and find a new means of maintaining control over them, hence the lockdown — by inventing a bogeyman like the virus. Yup, shrewd move. Got to give them that.

            • Tim Groves says:

              Yes, you’re cooking with fire there, my man! Someone may well have been making stuff up on purpose in order to deceive the world and make it dance to his tune.

              I’d like to know the truth, the whole truth, etc., about this pandemic. But since I don’t have that luxury, I am aiming to identify as much of what is false as I can in order to get a decent idea of where the bounds of possibility lie.

              Some people, whether intensely gullible, intensely cynical, or intensely astute, are blessed with a certainty that allows them to cry “BS” simply by glancing at a statement. They possess a mind like a barcode scanner, capable of reading and capturing the essence of something at a single pass. I lack this particular skill, this confident ability to feel certain about things without becoming familiar with their ins and outs. I like to keep re-examining things to see if they fit together without internal contradiction.

              At present, the cyanide from fracking theory is looking promising to me. Does COVID-19 attack hemoglobin In red blood cells, rendering it incapable of transporting oxygen? If so, prey tell, what coronaviruses—indeed, what viruses at all—have ever done that? I’m not a virologist. I’ve never even read the Ladybird Book of Viruses.

              Things that do attack hemoglobin and destroy its ability to transport blood include cyanide and carbon monoxide. What are the levels of these poisons in the air in winter in Wuhan, in Bergamot, and in the parts of New York where COVID-19 death counts are high? Where is James Lovelock when you need him?

              Here’s one from The Gladiators:

              Stop before you go, right now
              You’ll get hurt and that’s for sure
              Look before you leap, I say
              To prevent it’s better than having to cure
              Open your eyes and see
              Observantly you will understand
              So easy will you go to see what’s going on

          • Fast Eddy says:

            The threat of re-opening actually increases the fear levels in most people….

            The psychologists are doing a stellar job here….

    • I would agree that the tests are terrible. We can’t tell who is infectious and who is not. We cannot tell who is immune and who is not. At the same time, an article with the title of Coronavirus Panic sounds like it is quite biased in its reporting. I prefer sources that don’t put an obvious bias in the title.

  5. frankly step-by step says:

    When the Rich feel not rich enough they go to such places. The German finance minister are to be left out in the cold.
    And I estimate. One discredited closed. Three new open.


  6. Rodster says:

    “BIG TROUBLE FOR THE BIG THREE U.S. OIL COMPANIES: Financial Disaster In Its Domestic Oil & Gas Sector

    While it’s no secret that the U.S. shale oil industry continues to be a trainwreck, the damage is now spreading deep into the financial bowels of the Big Three Oil Majors. Unfortunately, the largest, ExxonMobil, has the worst-performing domestic oil and gas sector in the group. So, it’s no surprise that ExxonMobil was forced to borrow money just to pay dividends.”


    • Fast Eddy says:

      Supports the CDP… what cannot continue … will stop … and it was about to stop just as Covid was introduced

    • Robert Firth says:

      Under classical economics, borrowing money to pay dividends was called a “death spiral”. But under MMT, who knows? Not I, for one.

  7. Dennis L. says:

    Inflation vs deflation – it depends:

    Charles Hugh Smith in his subscribed “Musings” has a very interesting summary of the conundrum – do prices go up or down? As this is subscribed it would not be proper to do other than a brief quote.

    “But the capacity to generate services isn’t quite as flexible, and so the cost of services such as healthcare, higher education, childcare, etc. have skyrocketed.

    Part of this dynamic arises from what economist Michael Spence identified as tradable and untradable goods/ services: we can buy shampoo made elsewhere in the world (tradable) but we can’t get a haircut from an overseas supplier (untradable).”

    Some of you know for the past year I have personally experienced a higher educational system which went from classroom to virtual. My impression is the non tradable aspect of higher education is over except for the absolutely brilliant(well, maybe not, Einstein did win a Nobel from a patent office) and those wanting networking. If credentialing can be done by examination(it is done in many licensed professions), then the educational monopoly is over and the economies of scale that allow many secondary areas to bleed out the student for pet projects are over. The virus has not so much changed the game as it has caused faster adoption of materials and technology already in place. Earlier I gave reference to cloud materials that went with calculus courses, some are are excellent others have room for growth. Individualized instruction using visual, auditory, kinesthetic(write notes) is all there.

    A note on Zoom which my class used: before beginning the instructor notified everyone that recording would begin, everything(student and teacher), visual and auditory and keyboard entered was saved. This is a very intelligent group, you all can follow that one to some obvious conclusions.

    Commuting time is nil and if students are going to move out of the house and then move back to the basement, why leave in the first place? Well, it is tough to get drunk and sex may be a bit of a challenge, but people have always managed. If you are going in debt, help mom and dad out and pay rent from a student loan, keeps it in the family.

    There really is virtually no cost to this type of education and the best are in the cloud, Stanford, MIT, Harvard are all there. Tests can be done at a testing center and the cost will be trivial compared to going to a university. Want a more invasive, local means of testing, facial recognition with a web camera as well as programs that recognize keyboarding styles. Some Coursera courses seem to require web cameras for this reason, I declined as it is for credit/credentialing whatever.

    Smith seems to be one of the more accessible bloggers, much like Gail without a comment section. He might be worth your time.


    Dennis L.

    • fred_goes_bush says:

      Been reading CHS for years. Lots of excellent ideas.

      He used to be quite optimistic and worked hard proposing a variety of commonsense solutions to pressing issues that would work really well . . . if only people didn’t behave like people.

      These days he’s more fatalistic.

  8. Marco Bruciati says:

    • SomeoneInAsia says:

      Historically China never wanted to modernize in the first place and would have far preferred to be left to her ‘primitive’ ways if allowed to. (Same with Japan.)

      And looking at where we’re all now headed, I’d have far preferred that, too.

      • Robert Firth says:

        Having visited Japan I tend to agree. We can blame Commodore Perry and the Convention of Kanagawa, I suppose, but the real damage was done by the intellectuals of the Meiji Restoration, who piggybacked on an excellent political reform to launch a campaign of westernisation.

        But perhaps the most disastrous event in recent Japanese history was her victory at Tsushima. This created a sense of military superiority that gradually transformed into a sense of racial superiority, with horrific results for not just Japan, but most of Asia.

  9. Dennis L. says:

    Okay, as all of us seek affirmation, I just came across this. It goes well with the post on education.

    Basically, it is winner take all once again, this time in education. MIT has been at this for years.


    This virus may not so much have changed things as accelerated processes already extant.


    Dennis L.

    • Jason says:

      Dennis, your missing the whole social and emotional aspect of going off on your own for the first time and meeting many young people of various background learning new ideas and sharing the experience with others. Making life long friends and future spouses, researching on a team of brilliant collegues, and yes going out at night, tripping, having sex, all in a fairly safe environment. It is one of America’s initiatory rites into adulthood. Lot’s of things are better in real life like playing and listening to music, pickup game of sports, or role playing games if that’s your thing. We are losing too much to autonomy and efficiency. Why don’t we have amazon deliver the same meal to 3 different couples and they can have a zoom dinner party. Young adults want to move and touch and sweat and fight and fuck and you cant take that away from them or humanity will turn into a bunch of androgynous grey aliens.

      • Of course, historically, the privilege of going off to college to earn the possibility of a better standard of living and meeting a spouse has gone to the privileged few. Now we have tried to extend the privilege to almost everyone, but with a huge amount of debt attached. To make matters worse, costs are a whole lot higher now. Young people expect to have their own bedroom and own bathroom, in instead of a shared room with a bathroom down the hall. Teaching faculty have Ph.D.s instead of M.A.s or M.S.s, and are supposed to spend quite a bit of their time on (often worthless) “research.” Dining rooms are a whole lot fancier, with choices other than “take it or leave it.” Universities and colleges need to support football teams, in order to get donations from male donors.

        • Robert Firth says:

          Sigh. When I went to college (in 1962) the bathroom was three floors down in the basement. Otherwise I washed in warm water delivered in a jug. Of course, the room was over five hundred years old and built atop a former leper colony, but to me it was a little piece of Arcadia. Later, I experienced the “take it or leave it” college dinners, but in a Renaissance dining room, where we had to wear full suits and gowns, and dined by candlelight. The old world, in its sunset, was fair to see.

          • Fast Eddy says:

            I ended up on a floor filled with football players and lots of hockey players (our school had no varsity hockey so they just crammed us onto the same floor as first yr football)…. so basically meat heads….

            In Canada hazing is not allowed nor are there frats… but those rules did not apply to our floor. And heaven forbid if you skipped the big night …. because you’d be snatched when you least expected it … stripped naked … tied to a chair … and rolled onto one of the female floors ….

            This one poor fella ended up on our floor … along with his trophies (I can’t recall but there were either for ballroom dancing or figure skating…) — probably not an appropriate floor for him… however he must answered ‘yes’ to the athletic interests section on the application form….

            Anyway — he gets nabbed after coming back from skating (not playing hockey… skating) — and lo and behold he’s stripped and he’s got a hockey cup on (obviously looking to enhance…) … he got dumped onto the girls floor …

            Soon after he relocated from our floor…. or maybe he hung himself… we were never told.

            The good thing is… all those people that did that to him (I did not get involved… but then nor did I try to stop any of this… as I was not so keen to end up on the girls floor naked … without an invitation…) will soon be dead!!!

      • Stevie says:

        Perhaps a silver lining to this would be to enable adult learners (meaning older non-traditional students) greater access to higher quality education. Or even younger folk that are more highly self-driven. Having experienced on and off campus versions myself, I would think most typical college age youth would much prefer and benefit from the traditional communal campus experience.

        I like Galloway’s notion of a gap year. I wish I had done that myself. I think my first college experience would have benefited with a respite from senioritis burnout. Even some college professors are recommending this as a Covid work-around.

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