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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3,868 Responses to Understanding Our Pandemic – Economy Predicament

  1. Harry McGibbs says:

    “Two months after Germany’s economy minister vowed to do everything so “no job” would be lost to the pandemic, unemployment has already risen more than during the entire 2008/2009 financial crisis.

    “The emerging strains in Europe’s largest labor market show that even countries with well-established safety nets struggle to shield workers.”

    https://www.bloomberg.com/news/articles/2020-05-26/virus-is-cracking-germany-s-defense-against-unemployment-surge

    • Harry McGibbs says:

      “Germany threw Lufthansa a 9 billion euro ($9.8 billion) lifeline on Monday, agreeing a bailout which gives Berlin a veto in the event of a hostile bid for the airline.

      “The largest German corporate rescue since the coronavirus crisis struck will see the government get a 20% stake.”

      https://www.wionews.com/business-economy/germany-stamps-authority-on-lufthansa-with-98-billion-lifeline-301041

      • Harry McGibbs says:

        “Berlin saw new protests against the country’s coronavirus lockdown over the weekend.

        “As well as protests in the capital, crowds also gathered in Munich and Stuttgart to demonstrate the German government’s response to the COVID-19 outbreak.”

        https://www.euronews.com/2020/05/25/protesters-take-to-the-streets-of-berlin-over-government-s-lockdown-response

      • frankly step-by-step says:

        No veto right, it only applies from 25% share. The German government receives 20% and a five percent option for a further five percent share.
        The whole thing is completely laughable. There is aid in the amount of 9 billion euros. The entire Lufthansa Group is currently traded on the stock exchange for around four billion euro.

        • Robert Firth says:

          Thank you for the update. In other words, the German government could have bought Lufthansa lock, stock & barrel for less than one half of what they paid for 20%. This is free money, with no proper quid pro quo, and therefore a direct violation of EU rules. Greece got no such largesse, and neither will Italy. “The strong do what they will; the weak endure what they must”. And read Thucydides to know how badly that ended.

        • frankly step-by-step says:

          The thing is not over yet. The EU Commissioner for Competition is opposed.
          Just why should the government pay money to Lufthansa AG without receiving any real value.
          It would be easier Lufthansa AG goes bankrupt, the government takes over the shop for little money and opens again.
          The losers would be the previous shareholders.
          I think that there was no agreement in the coalition of Social Democrats and Christian Democrats and only this way remained.

    • In the whole scheme of things, Germany’s 50% increase in the number unemployed (pre-COVID, after COVID) is doing better than most other countries. It is a whole lot better than the US, Italy and Spain are doing.

  2. Jarle says:

    Meanwhile in Sweden:

    4029 dead with S-C-2; 1656 80-89 years old, 1017 90+ years old, 888 70-79 years old, 287 60-69 years old.

    Random killer eh?

    https://www.svt.se/datajournalistik/har-sprider-sig-coronaviruset/

    • Fast Eddy says:

      Sounds like Covid is a great way to clear out the dead wood… pneumonia is a welcome reprieve from the misery of old age and/or KFC Binge Lifestyle

      • Xabier says:

        Seems there may be links to Alzheimers, too: sounds like a merciful end, really.

        Years of derangement and confusion, etc, or dead in less than two weeks from COVID?

        Yes please.

    • Tim Groves says:

      Let’s take the case of Elizabeth Tracy Mae “Bethe” Wettlaufer (née Elizabeth Mae Parker; born June 10, 1967), a convicted Canadian serial killer and former registered nurse who confessed to murdering eight senior citizens and attempting to murder six others in southwestern Ontario between 2007 and 2016. With a total of fourteen victims either killed or injured by her actions, she is described as one of the worst serial killers in Canadian history.

      While she was a nurse at Caressant Care, Wettlaufer began injecting some of the patients with insulin. In some cases, the amount was not enough to kill the patient; she was charged with, and confessed to, aggravated assault or attempted murder for those cases. Wettlaufer’s first assaults occurred sometime between June 25 and December 31, 2007. She confessed that she injected sisters Clotilde Adriano (age 87) and Albina Demedeiros (88) with insulin. While they later died, neither of their deaths was attributed to Wettlaufer. She confessed to two counts of aggravated assault in these matters.

      The first case in which Wettlaufer injected a patient with enough insulin to directly cause his death was on August 11, 2007, when she murdered James Silcox (84), a World War II veteran and father of six. Through March 2014, Wettlaufer also murdered the following patients at Caressant Care:
      Maurice “Moe” Granat (84)
      Gladys Millard (87)
      Helen Matheson (95)
      Mary Zurawinski (96)
      Helen Young (90)
      Maureen Pickering (79)

      While at Caressant Care, Wettlaufer also injected Michael Priddle (63) and Wayne Hedges (57) “with intent to murder”. She confessed to two counts of attempted murder in these cases. She left employment at Caressant Care in 2014, but in part-time work at other facilities and at patients’ homes, she injected three more people with insulin:
      Killed Arpad Horvath (75) at Meadow Park facility in London, Ontario
      Injected Sandra Towler (77) “with intent to murder” at a retirement home in Paris, Ontario
      Injected Beverly Bertram (68) “with intent to murder” at a private residence in Ingersoll, Ontario

      Funny old world, innit? Deliberately kill people individually by injecting them with insulin and at the very least you’ll face imprisonment. Do it wholesale by arranging for others to inject millions of people with something labelled “vaccine” and you will be hailed as a savior and a philanthropist.

      On June 26, 2017, Wettlaufer was sentenced to eight concurrent life terms in prison, with no possibility of parole for 25 years.
      In her confession, she admitted that she “knew the difference between right and wrong” but she was visited by “surges” she could not control. She said, “God or the devil or whatever, wanted me to do it.” After one murder, she felt “the surging … And then [heard her own] laughter afterwards, which was really, it was like a cackling from the pit of hell.” She told police she had tried to stop killing, and she had told friends, a former partner and her pastor about the killings, but no one took her seriously.[10] During the police interview she described the laughter as a feeling within her mid chest (visually using her hands) and the feeling prompting her to overdose and subsequently kill as coming from her stomach region, the description of the laughter in the police interview is a feeling not an audible laughter and throughout never claimed to derive pleasure from it always saying the feeling was horrible.

      https://en.wikipedia.org/wiki/Elizabeth_Wettlaufer

      • Robert Firth says:

        A “life term”. With no possibility of parole until some bleeding heart judge finds an excuse to free her? Now you know why I support the lex talionis: blood for blood; life for life.

    • Fast Eddy says:

      What about the children — oh the children — poor children!!!

      It would be so much easier being an SDR….

  3. Harry McGibbs says:

    One for FE and friends:

    “The transnational elite is using COVID-19 to execute a carefully conceived plan X.

    By mid-March, many top Russian scientists concluded that the virus is a new version of the common SARS, lack of a vaccine is not lethal and the development of collective immunity is inevitable, a view shared by Western scientists and the World Health Organisation.

    “Oddly, 50 to 85 per cent of the victims are asymptomatic. This strange property suggests the artificial origin of the virus: Infection can spread rapidly and affect a relatively narrow target group. Between contagiousness and numerous latent carriers, quarantine or “stay at home” will fail to flatten the curve of severe cases that need intensive care. This was the only rationale for freezing economic activity anywhere with lockdowns…

    “Parallel developments in the world of finance, oil and gold markets suggest that the global hype is a cover for redistributing power. Each week of a frozen economy destroys thousands of enterprises. The goal of this hybrid warfare is de-industrialisation: Pushing people out of the manufacturing economy, population reduction and the final destruction of the middle class.”

    https://www.dailypioneer.com/2020/columnists/collapse-of-world-economy.html

    • Xabier says:

      ‘Planned de-industrialisation’? Utter tripe.

      It’s a global balls up, by those who fail to comprehend systemic issues: and the cascade of unintended consequences is only just starting……

      Theories like this remind me of the notorious ‘Stab in the back’ which so many Germans believed in after WW1; when in fact it was the Jewish bankers and industrialists who tried everything to help Germany win the war.

      No, deranged little man, the elites didn’t orchestrate all of this just to push you ‘out of the middle class’. That they are taking advantage of it -as always – in order to line their pockets is no proof of that.

      Still, millions will believe this crap, I am sure.

      • Kim says:

        But how can the consequences be unintended when they have all along been so obvious?

        Oops! Closing the international economy has thrown nations out of work and bankrupted millions of small businesses. Who could have foreseen that?

        There is a saying “Too stupid to be stupid” and that applies here. It has been an obvious fraud since Day One. Look at the numbers. It has been a not-very-untypical flu season where the media and governments have – in the most blatant ways – inflated death figures and printed stories and stories that were obviously false and intended to create hysteria.

        Now, you can debate why they have done it, but you can’t say it hasn’t been done.

        • Xabier says:

          History shows us, time and time again, that governments often do things which are perfectly obvious in their likely consequences – to all but the rulers.

          A key factor is the usual disconnect between the higher levels of government and reality,

          What the have done is both less sinister, and in a way much more terrifying.

          • Robert Firth says:

            Xabier, I’m pretty much with you on this one. Sometimes I think the last ruler who knew exactly what to do to save his people, and the went out and did it, was Vlad Tepes. But when modern politicians worry about “consequences”, they worry about the consequences to themselves. That is the fatal flaw of democracy: power is given only to those who seek power, and they are the last people who should be entrusted with it. Better to do as the Greeks did, and select the leaders by the casting of lots. Or as the Middle Ages discovered, by dynastic monarchy tempered with a strong ethic of noblesse oblige.

      • Harry McGibbs says:

        Xabier, I agree.

      • Hide-away says:

        Yes Xabier I agree as well. De-industrialisation does not help anyone, especially with the overpopulation we have.
        Yes people will take advantage of the situation, there are always people that take advantage of any situation, but planned, no way.

        The whole world was utterly unprepared for a pandemic like this (it could have been much worse). We had put off the prospect of a major pandemic for decades, relegating the thought of such things to third world countries only, we would deal with them there.

        There are no “Economic Models of a Pandemic” that even come close to what has happened, with frightened governments around the world clutching for any possible answer.

        To me it seems the one thing they didn’t want was uncontrolled demolition of the economy and health system, so instituted ‘lockdowns’ to try and have some control of the chaos. I don’t blame ‘lockdown’ at all for the problems we have. We were already going downhill and the whole combination of coronavirus plus response just pushed the world of hubris over a cliff.

        At least the next year or 2 will be highly interesting in how much can be salvaged.

        • john Eardley says:

          Hide-away, the UK government did its best to avoid lockdown and only did so after the majority of the country already had: football and rugby matches cancelled, theatres and cafes closed. Only pubs were open the evening before lockdown started and that seemed to be just a last pint for the masses.

        • Xabier says:

          Seeing it as an ill-judged attempt to avoid uncontrolled collapse is a useful point of view.

          The decline of mass-market high-street retailers certainly seemed to be gathering pace in the UK in 2018-19, well before the lock-downs.

          They were really just a push on the rapid accelerator button; but I fear many formerly more solid businesses will go under as a result.

        • Fast Eddy says:

          Ya and face coverings are ‘harmful’ during a pandemic…

          Except on the CDC site right? https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/cloth-face-cover-faq.html

          Keep on reading those MSM headlines mate

      • Fast Eddy says:

        Actually the stab in the back is real.

        German bankers sold out their country in exchange for the land that is now called Israel.

        That’s actually fact.

        The accepted name for this is the https://en.wikipedia.org/wiki/Balfour_Declaration but Hi tler referred to it as ‘the stab in the back’

        Israel says Balfour Declaration — Hi t ler says Stab in the Back…

        Now if one was a German one might be a little upset about that little incident given it contributed to your losing WW1… resulting in horrifying conditions in that country for years …

        I highly recommend reading Mein Kampf… well at least the first third of it or so… because that’s the part where Hi t ler explains the stab in the back … and how he developed his intense hatred for a certain group of people…. that last two thirds is basically endless vitriol and spitting hatred… (because of the stab…)

        Of course nobody will read that book…. it doesn’t mean one has to agree… but it’s useful to understand where the man was coming from

        And to think this was all about oil

        • Matthew Krajcik says:

          “And to think this was all about oil”

          I’m pretty sure the oil from Iraq flows through Israel, and/or is refined there? There is also large untapped reserves of oil and gas off the coast of the Gaza strip. They were going to start developing that oil and gas in 2007, but then suddenly Hamas came into power.

    • Matthew Krajcik says:

      “Between contagiousness and numerous latent carriers, quarantine or “stay at home” will fail to flatten the curve of severe cases that need intensive care. This was the only rationale for freezing economic activity anywhere with lockdowns…”

      And yet many places have flattened the curve and some even got to zero transmission. Part of the problem is things like high density and mass transit, part of the problem is that some areas just have too many willful people that refuse to stop spreading the virus.

    • Fast Eddy says:

      Somehow I do not think they’d leak this if it was the plan.

      As for the CDP… you will NEVER read about that anywhere but on OFW. NEVER

  4. Tim Groves says:

    This video featuring US-based virologist Dr. Hakim Djaballah is from mid-March, but it is easy to understand and has some good basic information.

    Lessons learned from Dr. Djaballah about the COVID-19, caused by the SAR-CoV2 virus, can be summed up in several notes.

    – How much do we know about this virus?
    – Where far are we from developing a vaccine?
    – Who holds the key to understanding the nature of COVID-19?
    – The debate: Mask or no mask?
    – Why don’t we have a vaccine for SARS-CoV1 yet?
    – Can we stop the spread? How?
    – Lessons to learn from the COVID-19 outbreak.

    • Some of the things this video says:

      Vaccine only works with your immune system. It simply directs your immune system where to go. If your immune system is not working well, a vaccine that works for other people may not work well for you.

      There is no vaccine for SARS; it is not really amenable to a vaccine.

      Companies only make a vaccine for a virus when there is a crisis and money is given to fund the vaccine. This is how Ebola got a vaccine.

      The virus that is now in Europe is much more aggressive than the one that left China.

      Masks are helpful in preventing the virus from spreading.

      Thinks disinfection will help get the number of viruses down in Korea during the summer months.

      He wants to monitor for new viruses and shut the border to any country that seems to be exporting a new virus. (I don’t think this really does much; viruses go every direction at once.)

  5. CTG says:

    Gosh FE… your G3T is perfect. I am really….. speechless

    Helicopter Money Could Be Coming To New Zealand
    New Zealand’s economy is export-reliant and expected to contract a stunning 21.8% in the current quarter due to the pandemic.

    https://www.zerohedge.com/personal-finance/helicopter-money-could-be-coming-new-zealand

    • It will be interesting to see how the New Zealand Dollar fares relative to the US dollar, with helicopter money. The NZD is quite low already. A falling NZD tends to make the price of imported goods more expensive. It does make exports cheaper, if there is someone willing to buy them.

      • Fast Eddy says:

        And guess what…. our business is paid in HKD which is pegged to the USD…. I also hedge the HKD by owning USD outright…

        I suppose I should thank G3T for the nice bump…. unfortunately NZers earn NZD… and just about everything is imported… so you’d think they’d be less than pleased with her achievement?

        Oh right — she is paying them to do nothing. Happy times.

        • Fast Eddy says:

          Hopefully I’ll get some helicopter munny…. I’ll celebrate by using it to buy a couple of boxes of good French red (NZ reds are very overrated…) …

          Of course M Fast will be on me to use the chopper cash to buy more food to donate to the 10,000+ people on welfare in Queenstown … instead of the French wine…. I can hear me now — Ardern caused it — she can take care of them — I deserve the wine!!!

          Anyway the good thing is that Argentina defaults on their debt All The Time… and people buy their bonds…… so why can’t NZ follow that model?????

          • Robert Firth says:

            FE, all New Zealand wines are overrated, not to mention overpriced. If you want good Southern Hemisphere wines, check out the Maipo valley in Chile. They make excellent reds and a really good sparkling wine. The wine is produced by a commune, so your money goes mostly to the people who actually grow and tend the vines.

  6. CTG says:

    Xabier, Norman and those in UK …..

    Rabobank: “Public Anger Is As High In Many Other Countries As It Is In The UK”
    “Still arrogant and offensive”. Not today’s Daily – again, or not not deliberately and/or any more than yesterday.

    Rather those four words reflect the entire British media’s response to PM Boris Johnson’s special advisor Dominic Cummings, who clearly broke the lockdown rules, but who then refused to apologise in a car-crash surreal press conference held in the sunny Downing Street rose garden, instead creating various excuses to justify his behaviour.

    https://www.zerohedge.com/markets/rabobank-public-anger-high-many-other-countries-it-uk

    • Harry McGibbs says:

      The biggest revelation for me was how mentally mediocre Cummings is.

      The press conference was ill-judged and ineptly executed. He was stilted and incapable of thinking quickly on his feet when facing a barrage of questions – questions which he should have anticipated. And unfortunately he had zero personal charm to fall back on when his answers fell flat, just a claim to victimhood and an implied plea for sympathy that were no less than embarrassing when many UK citizens have held fast to these strictures at great personal cost, unable to visit relatives as they lay dying etc.

      Anyone with an ounce of common sense could see that the only conceivable way of defusing the situation at this late stage was to be a bit human and humble about it all but he was too arrogant even to attempt that. I kept thinking – *this* is what a brilliant political strategist looks like?!

      • john Eardley says:

        Harry, all gone quiet though hasn’t it. I loved the 30 minutes he kept the press waiting and particularly the smirk on his face as he left. The press were simply shown up to be the hateful group they are. Particularly vindictive were the women who were pretty nasty pieces of work..

        • Harry McGibbs says:

          “Harry, all gone quiet though hasn’t it.”

          Eventually this will die down, as I’m sure they are calculating, but the hit to Boris Johnson’s goodwill and credibility may be longer lasting.

          Honestly, I am apolitical these days and not mentally invested in the drama either way. I was just surprised, not really having seen him interviewed before, to have found Cummings so inept and underwhelming.

          His accent is all over the place, too, from pseudo-cockney to received and back up the far NE; a sign of someone without a sure sense of himself.

      • Xabier says:

        Quite right. Alas, his ‘brilliance’ probably shines most when he looks in the mirror while shaving…..

      • Malcopian says:

        ‘I kept thinking – *this* is what a brilliant political strategist looks like?!’

        That’s the difference between form and content. Never judge a book by its cover. You should know that by now.

        Large sections of the Press hate Cummings because they know him as Mr Brexit, the man who used AI and Cambridge Analytica to swing votes. The man who invented the phrase: ‘Take back control.’

        Remember, there is another side to Cummings:

        =========
        Dominic Cummings said Tory MPs do not care about poor people or NHS

        Exclusive: Johnson’s senior advisor expressed damning views in 2017 and now has key role in No 10

        https://www.theguardian.com/politics/2019/jul/30/dominic-cummings-tories-do-not-care-about-poor-people-or-the-nhs

        =========

        Remember that Boris has described himself as ‘a Brexity sort of Hezza (Michael Heseltine).’ I believe he is sincere in wanting a more leftward Tory slant. He also said, ‘There IS such a thing a society’ – to show he is not a neo-Thatcherite. I doubt that Theresa May would have been so quick to loosen the purse strings in an emergency – that’s probably why Boris got rid of neo-Thatcherite Sajid Javid as Chancellor.

        Boris is not an ideas person, but he can see politics changing. He needs and wants somebody like Cummings who is not afraid to criticise short-comings. It doesn’t matter what Cummings looks like – only the Press is interested in that, and that’s why they’ve created a storm in a tea cup over this trip of Cummings.

        Read his blog, and you’ll see Cummings does have a brain, yet nor does he identify as a Tory. He’s spoken of the need for government to master AI in this new age of cyber attacks. Our stuffy civil servants need to be shaken up for sure.

        However, politics is also about image, so the Press may yet be successful in taking Cummings down. Will Boris keep his nerve, emulate his hero Churchill, and support his man through thick and thin? Let’s hope so. I’m fed up with this lockdown charade that has encouraged people and police to resort to Gestapo snitching tactics, when their neighbours merely indulge in normal activities.

        • Harry McGibbs says:

          Malcopian, he may have a nice line in intellectual abstractions but EQ, common sense and charm he has none.

          • Malcopian says:

            Well, if you’re sold on charm and appearance, I suppose you loved Tony Blair. 😦

            • Harry McGibbs says:

              Re Blair, er no. That creepy smile, the weird, staccato delivery, the obvious lack of a moral core… Not somebody I would give five minutes to at a drinks party.

            • Fast Eddy says:

              I’d like to see Blair and Bill Clinton in a cage match … fight to the death. I’ pay Big Big Big Money for ring side seats.

              Since Blair is younger…. Bill can have HRC backing him up.

          • Harry McGibbs says:

            Either that or he literally did not care about antagonising the public and went into a press conference not caring about appearing plausible, which is, in its own roundabout way, stupid.

            • Malcopian says:

              I don’t see it as that straightforward. Driving in a private car is endangering people? I think this whole lockdown thing is nonsense, anyway. I’ve had enough of photos of policemen standing over holidaymakers.

            • Malcopian says:

              Come to think of it, in the early days Thatcher’s first government, Sir Keith Joseph was pushed forward as her ‘monetarist’ genius, but eventually he was sidelined for not being streetwise enough in politics. Or maybe because his monetarist policies actually produced soaring unemployment! So perhaps he was an early Cummings-like figure.

    • john Eardley says:

      Cummings did not break either the guidance or any law. People just don’t do detail particularly the press.

      • xabier says:

        I rather dislike the obvious arrogance of the man, and in particular his immature posing -the sweatshirt instead of a decent suit, just to show he’s a cool outsider,etc; one should have got over that by about 22yrs old – but he seems to have acted responsibly and not placed anyone vulnerable at risk.

        Fulsome apologies would have calmed the whole matter, and the UK press would have moved on to their next senseless feeding frenzy.

    • Xabier says:

      Really Cummings just comes in for his share of the general contempt which most feel towards the political class these days. I haven’t spoken to anyone who is raging and foaming about him.

      And Boris has just exhausted the slight sympathy he garnered for having been at Death’s door.

      ‘Carry On Britain’, the never-ending farce.

    • An attempt to be balanced–really to say what has been said in the past. Stay inside; wear sunscreen. Vitamin D might be bad for you.

      • Tim Groves says:

        George Bernard Shaw knew far better than today’s medical mandarins.
        He bathed in the sun and lived to the ripe old age of 95.

        • Rodster says:

          Life is a crapshoot. One person who sunbathed lived to 95. You can find others who lived that long for other reasons. My dear auntie lived well into her 90’s as well. Her secret? She was a chain smoker and a heavy drinker up until her mid 80’s.

          • Tim Groves says:

            One of my best English friends here in japan is a redoubtable 80-year-old lady who is also a chain-smoker and a heavy drinker. She looks very frail these days but always seems to be able to get up and function. If we must look for a reason, she runs an animal shelter with a couple of hundred four-legged “clients” and a dozen legged staff. It’s something she feels she has to do every day. If she was in a nursing home with nothing more important than playing whist to keep her occupied, I doubt if she’d still be with us.

        • Yorchichan says:

          Bathe in the sun whilst in a natural state of ketosis and even an old vampire like me doesn’t burn.

  7. Ed says:

    Let use the small pox vaccine method. We infect everyone under the age of 50 with cv19. We can do it in groups so as to not over load hospitals, says 8 groups one per week. We supplement with D, C, Zinc, and zpac (to avoid cytokine storm).

  8. Xabier says:

    In terms of post-opening attitudes, a customer of mine (69 but super-fit) says that he will be very cautious until the results of greater mixing become clear,and will make his family reunion a picnic and definitely not in a pub or restaurant. Bodes ill, I think, for services hoping to swing back into action, many will probably be thinking like this.

    • I have enough relatives who think this way to see the problem.

    • Chrome Mags says:

      The problem is people don’t know what will happen if they get covid-19. Many do fine but many others don’t and some die. So it’s like standing at the end of a craps table about to toss dice. A good roll and you’re home free, however a bad roll and you’re in an ICU with the prospect of intubation, which doesn’t usually end well. Then it’s too late and you’re wondering why you risked it. I don’t know anyone over 60 willing to roll the dice. But maybe people over 60 isn’t the problem because many of those people are retired on fixed incomes. Maybe the concern if for those 20-60. Maybe someone young is more likely to roll the dice.

      Could there be an ad on TV, in which a young person is standing at the end of a craps table and someone is saying to that person, “You’re young and healthy, so go ahead and roll the dice on what may happen to you if you get Covid-19. Help get the economy up and running again. Go travel and spend. Toss caution to the wind. You’re tough, go for it!”

      • Matthew Krajcik says:

        ““You’re young and healthy, so go ahead and roll the dice on what may happen to you if you get Covid-19. Help get the economy up and running again. Go travel and spend. Toss caution to the wind. You’re tough, go for it!”

        The problem is, that for months people have been punished and harassed for exactly that thinking. Very difficult to try to encourage what you just said was bad.

        • Fast Eddy says:

          Sounds scary! Except that almost no young healthy people are dying from this.

          SDRs are SDRs because….. they are SDR

      • Fast Eddy says:

        Ya if you are obese — disease riddled — and/or old… it’s a crap shoot.

        But then if that’s you then isn’t every day a crap shoot?

        What does it feel like to wake up every morning feeling like sh it?

        You go to the bathroom… swing that big fat belly to the side…. and try to find your dongle… and take a p iss…. what’s that like?

        When you wake up a 5 degree slope or 5 stairs… you gasp for air… when you bend over to tie your shoes your head turns 7 shades of purple….

        How do your joints feel having to haul around 50 extra kg? I’ve actually loaded 50kg onto my back and walked around the yard just to see how it does feel – do you get used to that?

        I have no idea what all of this feels like because I have not lived on KFC and Big Gulps…. but I am thinking that I had…

        I’d welcome Covid… what a relief it would be to not have to wake up feeling like sh it every day.

        • Tim Groves says:

          Six hundred and fifty thousand people every year in the US die from heart disease. That’s one in every four deaths.

          Six hundred thousand people every year in the US die from cancer. Ditto.

          According to a recent study by Johns Hopkins, more than 250,000 people in the United States die every year because of medical mistakes, making it the third leading cause of death after heart disease and cancer.

          These are the Big Three—every year they top the charts. Together they account for about 60% of all deaths in the US.

          Are people scared of these things? Scared enough to lose weight? Scared enough to exercise? Scared enough to adopt healthy lifestyles? Scared enough to avoid getting into a situation where they have no choice than to go into hospital and/or go onto long-term medication?

          There’s no mystery here. If they aren’t going to bother shape up and cut their risks of being mowed down by the scythes of heart disease, cancer and medical mistakes, why should they bother to avoid Covid-19. After all, if they are at high risk for the virus, their goose is cooked anyway. Their bucket’s been kicked! But as long as their happy with that.

          https://media1.fdncms.com/orlando/imager/lard-ass/u/slideshow/2276724/17jpg

  9. Ed says:

    Could it be people in nursing homes do not get sunlight and are deficient of vitamin D?

    • Ed says:

      Could the solution be as simple as giving daily vitamin D supplement.

    • This is at least part of the problem. I expect that Vitamin C is low as well. Many of the elderly have problems with their teeth. They want to eat only cooked /finely chopped food. I know an elderly aunt who lived with us wanted us to buy her baby food, because it didn’t require chewing.

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