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. Covidinamonthorayearoradecade says:

    https://www.ajc.com/blog/airport/hartsfield-jackson-manager-full-airport-recovery-could-take-years/TqfP5DQaru3I4VEItCy3mM/

    Atlanta airport manager (world’s busiest airport):

    “He hopes to see passenger counts recover next year to closer to half the level seen before the pandemic. But he cautioned that a full recovery to pre-COVID 19 levels could take two to five years.”

    because he has no clue about what is coming in the next two to five years…

    a recovery to half the 2019 level might be the best it gets…

    • Covidinamonthorayearoradecade says:

      https://www.reuters.com/article/us-health-coronavirus-american-airline/american-airlines-ceo-quells-u-s-bankruptcy-talk-says-demand-improving-idUSKBN2332YH?il=0

      “Bankruptcy is failure. We’re not going to do that,” Parker told a conference, adding: “I don’t think you’ll see any airline go by the wayside as a result of this crisis.”

      “The U.S. airline industry is expected to be 10% to 20% smaller in the summer of 2021, Parker said, and its recovery would depend on how passenger demand and revenues evolve.”

      well, at least the Atlanta airport manager realizes that 50% smaller in 2021 is closer to what’s coming…

      Parker must be figuring that all of the airline industry will be bailed out by the government…

      • Fast Eddy says:

        Hard to imagine BAU Lite lasting till summer 2021.

        Maybe we need to come up with a better term than BAU Lite… BAU Coma?

        • Covidinamonthorayearoradecade says:

          it doesn’t take imagination…

          just knowing that every gov/CB/billionaire/elite is wanting/working to keep bAU going…

          that might not prevent mass starvation, but it should keep the system/subsystems going for another 400 days, which is a very short amount of time…

        • BAU ketosis. Temporarily subsist off of stored “fat” in the system.

        • Kim says:

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

          Justine Diamond was a middle-aged white woman (an Australian). Ms Damond was in her pyjamas when a police car responding to a 911 call pulled into the alley behind her family home in the city’s Fulton neighbourhood. Ms Diamond, 40, approached the driver’s side door and spoke to the driver.

          The officer in the passenger seat. Mohammed Noor, then shot Damond through the driver’s side door. He was not able to provide any reason for killing Ms Diamond.

          No reason for shooting her. None. It was just an impulse he had.

          FE, I will stop this now, out of respect for the site-owner, but be assured that I can go on with stories like, and worse, for a very, very long time.

      • There is probably a limit to what can be bailed out.

      • Herbie Ficklestein says:

        Hmm, if that’s the case we shall see BANKRUPTCY and Massive JOB loss in the TOURIST INDUSTRY In general once the Bailout monies stop at end of September.
        Already Parker has announced 30% reduction in management support staff.
        Remember, currently to break even a airplane break even point is 75% load factor!
        If the high paying business fares don’t return, it will be almost impossible to make a profit!
        Fort Lauderdale Airport is largely empty of passengers…errie 🤢 like a John Carpenter horror flick…Only Southwest is running flights of any sort and they look very lifgt.
        Jet Blue and Spirit are not…parked planes Everywhere!
        Folks, looks like this is the BIG ONE a Depression and we have the right guy in office for that role🤑 the Powers selected the perfect personality to manage the downsizing.
        This Summer should be interesting.

  2. fred_goes_bush says:

    Useful articles:
    #1 Correlates virus death hotspots with pollution levels: https://blog.nomorefakenews.com/2020/05/19/covid-jim-west-expands-his-research-on-pollution-not-the-virus/
    Follow this link to Jim West’s own site for details: https://harvoa-med.blogspot.com/2020/04/COVID2020.html

    #2 Why vaccines don’t work as advertised and how they mess up your immune system: https://blog.nomorefakenews.com/2020/05/20/richard-moskowitz-md-and-homeopath-on-vaccination/

    #3 What the vaccination plan looks like: https://blog.nomorefakenews.com/2020/05/26/covid-19-vaccination-what-the-plan-looks-like/

    • Yorchichan says:

      While we are all bashing vaccines:

      • Interview with Dr. Sherri Tenpenny, who has spent decades researching the medical literature on problems associated with vaccines.

        I find her much more credible than the nurse whose video was posted a day or two ago.

        It seems like there is a pattern appearing. Why is it that researchers who look into what is going wrong with the current narrative tend to be older women, from slightly outside of the field? I would put myself into that category as well.

      • Tim Groves says:

        While we’re on this subject, a dissident doctor I greatly admire is Dr. Susan Humphries, who is yet another intelligent, articulate and compassionate mature American female who drives normies crazy.

        “And what you might notice, if you’ve been in the middle of this problem yourself, is that the people who want to vaccinate are often very aggressive and they don’t want you to hear the other side. And that should make a light bulb in your head go off: Why don’t they want me to hear the other side? Why don’t they think I can actually listen to both and come up with my own decision?”

        • Minority Of One says:

          Good video Tim, I hope others watch it. Only 20 min.

          • Interesting video! I expect what we need is a list of problems that seem to be associated with each type of vaccine, along with some probability that they will be helpful.

        • JMS says:

          In a world where science has replaced religion in many ways, It’s easy to see how vaccine can be seen by some as kind of religious experience, a sort of baptism that purifies the believer and liberates him from all evil and stain. The shield of faith for the soul, the shield of immunization for the body – i would say there’s all kind of parallelisms.
          It’s a fundamental need for human mind to feel (somewhat) protected and to believe that it has some control over the flow of events.

          • Lidia17 says:

            “The Saker” linked to this post recently:
            https://itself.blog/2020/05/02/giorgio-agamben-medicine-as-religion/
            https://www.quodlibet.it/giorgio-agamben-la-medicina-come-religione

            An excerpt:
            ===
            There is a malign god or principle, namely disease, whose specific agents are bacteria and viruses, and a beneficent god or principle, which is not health, but recovery, whose cultic agents are medicines and therapy. As in every Gnostic faith, the two principles are clearly separated, but in practice they can contaminate each other and the beneficent principle and the doctor who represents it can make a mistake and unknowingly collaborate with their enemy, without this invalidating in any way the reality of the dualism and the necessity of the cult through which the beneficent principle fights its battle. And it is significant that the theologians who set its strategy are the representatives of a science, virology, that does not have its own place, but is situated at the border between biology and medicine.
            If this cultic practice up to now was, like every liturgy, episodic and limited in time, the unexpected phenomenon that we are witnessing is that it has become permanent and all-pervasive. It is no longer a question of taking medicines or submitting when necessary to a doctor visit or surgical intervention: the whole life of human beings must become in every instant the place of an uninterrupted cultic celebration. The enemy, the virus, is always present and must be fought unceasingly and without any possible truce. The Christian religion also knew similar totalitarian tendencies, but they concerned only some individuals—in particular, monks—who chose to put their entire existence under the emblem “pray unceasingly.” Medicine as religion takes up this Pauline precept and, at the same time, reverses it: where monks gathered together in convents to pray constantly, now the cult must be practiced even more assiduously, but while remaining separated and at a distance.
            Cultic practice is no longer free and voluntary, exposed only to sanctions of a spiritual order, but must be rendered normatively obligatory. The collusion between religion and profane power is certainly not a new thing; what is completely new, however, is that it no longer concerns, as happened for heresies, the profession of dogmas, but exclusively the celebration of the cult. Profane power must keep watch so that the liturgy of the medical religion, which coincides by now with all of life, should be observed point by point in deeds. That we are dealing here with a cultic practice and not a rational scientific demand is immediately obvious. The most frequent cause of death in our country by far are cardiovascular diseases and it is well known that these could be reduced if we practiced a healthier form of life and if we followed a particular diet. But it has never crossed the mind of any doctor that this form of life and diet, which they recommended to the patient, should become the object of a juridical norm, which would decree ex lege what must be eaten and how we should life, transforming our whole life into a health requirement. …

            • JMS says:

              I’m somewhat of a fan of Agamben since “The Coming Community” (1993). He’s an esteemed cultural critic/philospher, with very good insights sometimes i think.

  3. Marco Bruciati says:

    Financial Crisis Will give supply chain problems as Always thought in past….or maybe opposite? Now seems Is the opposite

  4. Harry McGibbs says:

    “Wherever you live in America, you can see the misery of this economic collapse all around you, if you leave your lockdown to look; but the fabric of prosperity is fraying uniquely in every single city and town.

    “That’s why, in early May, The New York Times Magazine asked seven writers and seven photographers to capture how the crisis looks and feels among the newly jobless in seven different communities.”

  5. Harry McGibbs says:

    “Accepting food handouts for the first time has become reality for thousands in Spain where poverty has soared during the epidemic, echoing the 2008 crisis from which many have barely recovered…

    “For many people, it is the first time they’ve had to seek help.”

    https://www.thejakartapost.com/news/2020/05/27/in-spain-food-aid-queues-grow-as-poverty-outpaces-2008-crisis.html

  6. Fast Eddy says:

    New Virus Cases Double in S. Korea, Biggest Spike in 53 Days

    Excellent!

  7. Harry McGibbs says:

    “The eurozone economy will shrink by 8 to 12 per cent this year as the “sudden stop of activity” caused by coronavirus triggers a recession twice as deep as after the 2008 financial crisis, European Central Bank president Christine Lagarde has warned.

    https://www.ft.com/content/a01424e8-089d-4618-babe-72f88184ac57

    • Harry McGibbs says:

      “High debt and deficit levels will raise the risk of sovereign defaults, especially in Southern Europe, as high unemployment creates fertile ground for social unrest and political extremism across the currency area.”

      https://worldview.stratfor.com/article/will-covid-19-be-eurozone-s-undoing

    • A shrinking Eurozone economy will find it more difficult to bail out ailing member countries. In fact, these ailing member countries will find it difficult to fund the EU. Also, the UK leaving the EU also tends to reduce EU funding, making it difficult for the EU to continue with current programs.

    • Matthew Krajcik says:

      8 to 12 percent? That seems a tad optimistic. Everyone still looking for that V-shaped recovery?

      • Harry McGibbs says:

        You may be right re the optimism, Matthew, but Lagarde’s projection is still daunting, considering that a 4.5% contraction marked the worst year of the GFC for the Eurozone.

        It is strange hearing people and institutions who usually make it a point to ‘talk the economy’ up making such dire prognostications.

  8. Yoshua says:

    “According to the CDC, so far this year, Florida has had 1,762 deaths from #COVID and 5,185 from pneumonia.

    Average pneumonia deaths in Florida from 2013-2018 for the same time period are 918.”

    Blue states report a lot more Covid deaths than red states.

    The US has 20,000 new Covid cases daily right now.

    Europe and the US are going to open up their economies… because they have no other option.

  9. Harry McGibbs says:

    “Some 122 million Indians were forced out of jobs last month alone, according to estimates from the CMIE.

    “Daily wage workers and those employed by small businesses have taken the worst achievement. These include hawkers, roadside vendors, workers employed in the construction industry and many who eke out a living by pushing handcarts and rickshaws.”

    https://newsd.in/worlds-biggest-lockdown-to-push-12-million-indians-into-extreme-poverty-reports/

  10. Marco Bruciati says:

    Italia 180 %defict GDP. Greece. 220% deficit GDP

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