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. rufustiresias999 says:

    Jesus what did the Hindies do to suffer the wrath of almighty God? Lord have mercy upon us.

    https://thediplomat.com/2020/05/virus-heat-wave-and-locusts-form-perfect-storm-in-india/

  2. fred_goes_Bush says:

    Re: US riots: Gail has pointed out before that populations tend to go nuts when economic hard times hit. There’s often a trigger event to set things off e.g. George Ford, but the underlying driver is economic deprivation. There’s plenty of that due to the virus and the inevitable consequences of the lockdown.

    The Yellow Vests are out in France again too.

    Who reckons this is part of ‘the plan’?

    • Kim says:

      “The underlying driver is economic deprivation”

      There is no evidence for this view. Different “communities” may be (and are) equally economically deprived yet their behaviors can be (are) very, very different.

      I, a white man, can walk alone through the poorest slums of Jakarta at 2a.m. and not a hand will be laid on me. Some other much wealthier (but always complaining) parts of the usa and such a stroll would be certain suicide.

      What are the distinguishing factors?

      • NikoB says:

        the US is fuched.

      • CTG says:

        Kim, different countries have different values, mindset and culture. You can walk across Tokyo in the middle of the night without any issues. Same goes to Singapore or many of the Asian countries. Economic deprivation affects people differently in different countries.

        The threshold of “people laying hands on you” is different for each society. It will be lower in USA but higher in Germany perhaps. In Jakarta if you are in 1997, you will be dead even if you are in your own house. Time is also important (as in 1997). If it is in Italy 20 or 30 years ago, probably not so much on an issue. There is wealth all around and people are not desperate. If it is Italy in July 2020 when there is no enough money go around, they all hands will be on you as a tourist.

        There is a point where people had enough and have nothing to lose. There will always be an agent provocateur in these “riots” and people will join in.

        Bottom line is threhold of economic pain, culture and tolerance towards anarchy. Different ethnic groups have different threshold level.

        • Merrifield says:

          According to authorities in Minnesota, up to 80% of those arrested are from out of state–apparently outside forces –on both the left and right, but from early reports, there have been a lot of “calls to action” to join these protests from on-line white supremacy groups.

      • Hubbs says:

        The actual deprivation and the PERCEPTION of wealth inequality, especially if elites gain it through non-productive work (financialization and favorable taxes and other laws.)

      • It's all so tiresome... says:

        A team of star college basketball players went to China. Despite their privilege, they decided to shoplift some costly items from high-fashion outlets. Trump had to negotiate to get them returned to the US without adjudication or punishment for the thefts. They were not from deprived homes. either. It’s a matter of attitude. The millionaire father of one errant “boy” remained belligerent:

        https://nypost.com/2017/12/05/liangelo-balls-shoplifting-excuse-my-teammates-did-it-first/
        “Now we over here — we gotta serve some more punishment? He apologized. What is the long process for? We only went to UCLA — one and done — to play basketball.”

    • When there are not enough goods and services to go around, changes that act to increase wage disparity or increase the number of jobless are very much resented. Shutdowns keep these problems bottled up for a time, but they ultimately lead to more job loss and wage disparity.

      In fact, changes in general are difficult. Back before the late 1960s, energy consumption per capita in the US was fairly low. Segregation was an accepted way of life. Once more energy consumption became available, resentment grew that blacks could not participate as much as they would like in the benefits of greater energy consumption. At the same time, more energy consumption by blacks might indirectly lead to less energy consumption by poor whites (and others). Busing students from one part of town to another would by itself use more energy. Mixing students with poorer educational background with those with higher education background would make classes harder to teach. Home values where busing took place were feared likely to fall. The extra energy required to fix all of these problems was not really there. So resentment over the plans grew. People moved to the suburbs, abandoning the cities, so that they would not have to deal with these problems.

      • Rodster says:

        “When there are not enough goods and services to go around, changes that act to increase wage disparity or increase the number of jobless are very much resented. Shutdowns keep these problems bottled up for a time, but they ultimately lead to more job loss and wage disparity.”

        One of my Gerald Celente quotes: “When people lose everything and have nothing else to lose, they LOSE IT”

      • Dennis L. says:

        Gail,
        Jobs still exist around here, maybe not as many, but jobs. An issue in manufacturing seems to be the skill level required for advancement, mechatronics is big but that is one of the more difficult mental areas. Modern machining is more design and as of yet from what I can see 5 axis machining is an art requiring substantial mental agility or both the part and machine are ruined.

        There are probably more policy wonks than needed, there is probably enough policy all ready done such that review of past policies, evaluation of their effectiveness would result in simplification.

        Some here think the advanced technology will disappear, there are people on YouTube making integrated circuits in their basements or garages, very simple, but much more complicated than transistor circuits of the 1960’s. The equipment is not that expensive, the knowledge to use that equipment is difficult to attain.

        There is a fellow on YouTube, Applied Science, who has made an electron microscope and other interesting devices as well as exploring esoteric areas of physics. From what I gather, he is a Google engineer of some sort for his day job. His shop is relatively simple, the results are incredible.

        We all see what is happening around us, I suspect we are not a very diverse group, we seem to have little difficult discussing very sensitive ideas and still maintaining civility – thanks in great part to your example.

        If America does not make it, based on past history, no one will make it. We will make it and if history is a guide, we share well, not perfectly, but well.

        Dennis L.

  3. Marco Bruciati says:

    I have no doubt that it is all the fulfillment of the Bible because all together Arctic economy virus collapsed all together in the same peak oil year. What were the chances of it all happening together is there any mathematician in the room? And waiting earth quakes

    • I don’t understand quite what you mean when you say “Arctic economy virus collapsed all together in the same peak oil year. Could you explain?

      • beidawei says:

        I read this as “the Arctic, the economy, and the virus collapsed all together”

        • You are no doubt right. Energy consumption (or lack thereof) is involved with each of these. The peak in oil production was perhaps in November 2018. Total fossil fuel production will likely be down in 2020, because of low prices related to the coronavirus response. Thus, the response to the virus helped bring down the economy. The loss of particulate matter (because of the response to COVID-19), no doubt contributed to the Arctic’s problems this year, because the sun could warm the area more without the small particles.

        • Tim Groves says:

          According to NOAA, the Arctic ice maximum in March was boringly normal for the time of year and is “nowhere near the bottom of the pack,” much to Guy Mc P and Prof. Waddhams’s chagrin.

          Arctic sea ice extent—the area where ice concentration is at least 15 percent—reached its apparent annual maximum on March 5, 2020. On March 24, the National Snow and Ice Data Center (NSIDC) reported that the 2019–2020 growth season had an unexceptional finish: 5.81 million square miles (15.05 million square kilometers). It was the 11th-lowest maximum in the 42-year satellite record.

          https://www.climate.gov/news-features/featured-images/unexceptional-arctic-sea-ice-maximum-2020

          The biggest current issue is that polar bears are being attacked by a deranged graffiti artist. Police are not sure if it’s Banksy or David Attenborough.

    • Lidia17 says:

      Marco, yep.. it’s a kind of ‘perfect storm’. The melting of the Arctic, economic collapse, peak oil (I think the virus is being used as a screen for these issues)..

      From my point of view as a determinist, the chances of all this happening were 100%. The “Limits to Growth” chart shows a confluence of bad trends for life on the planet as well as for industrial civilization happening right about now. We don’t need supernatural explanations.

      If I am not mistaken, the Jesus character in the Bible said that (implying the end of times) he would return within his disciples’ lifetime. Either he didn’t, or he did and nobody noticed.

      • Those writing the Bible were definitely confused about timing.

        Jesus said, “Lo, I will be with you always, even to the end of the age.” Matthew 28:20.

      • Matthew Krajcik says:

        My take is that he must have came back during the Siege of Jerusalem. Whoever got raptured, got raptured and everyone else in the city was killed so no living witnesses.

  4. Herbie R Ficklestein says:

    Before video camera phones, how many of such police abuses occurred?
    Well, this office that committed this death had 19 offense complaints in his 19 years on the force, with 2 discipline “actions”. Believe the other officer had 5 or 6 with no “Actions” taken in his 6 years on the force. Looks like common practice, at least in Minneapolis, of lax oversight on general. Do worker told me the Police Union there is very powerful and it’s reputation is known for harassment.
    Here in South Florida, so far all is calm and my coworkers of color are not acting out in any way.
    Was here during the Liberty City riots back in 1980, not pretty
    The 1980 Miami riots were race riots that occurred in Miami, Florida, starting in earnest on May 18, 1980,[1] following the acquittal of four Dade County Public Safety Department officers in the death of Arthur McDuffie (December 3, 1946 – December 21, 1979). McDuffie, a black salesman and former Marine, died from injuries sustained at the hands of four officers trying to arrest him after a high-speed chase. Wilkapedia
    But. AP James LaCorte.. As unrest spread across dozens of American cities on Friday, the Pentagon took the rare step of ordering the Army to put several active-duty U.S. military police units on the ready to deploy to Minneapolis, where the police killing of George Floyd sparked the widespread protests.
    Soldiers from Fort Bragg in North Carolina and Fort Drum in New York have been ordered to be ready to deploy within four hours if called, according to three people with direct knowledge of the orders. Soldiers in Fort Carson, in Colorado, and Fort Riley in Kansas have been told to be ready within 24 hours. The people did not want their names used because they were not authorized to discuss the preparations.
    The get-ready orders were sent verbally on Friday, after President Donald Trump asked Defense Secretary Mark Esper for military options to help quell the unrest in Minneapolis after protests descended into looting and arson in some parts of the city.
    Trump made the request on a phone call from the Oval Office on Thursday night that included Esper, National Security Advisor Robert O’ Brien and several others. The president asked Esper for rapid deployment options if the Minneapolis protests continued to spiral out of control, according to one of the people, a senior Pentagon official who was on the call.
    ”When the White House asks for options, someone opens the drawer and pulls them out so to speak.” the official said..

    With Unemployment at Depression levels and no recovery in sight this is a powderkeg.
    Might see at least another Stimulus cheque and later a UBI coming.
    Don’t know how they will pay for it, but regardless there will be stagflation…😜👍

  5. Herbie R Ficklestein says:

    Did he actually say this without breaking into giggles?😜
    Washington(CNN)President Donald Trump launched a blistering attack on Beijing Friday, naming misdeeds that range from espionage to the violation of Hong Kong’s freedoms, and announced a slew of retaliatory measures that will plunge US-China relations deeper into crisis.
    “They’ve ripped off the United States like no one has ever done before,” Trump said of China, as he decried the way Beijing has “raided our factories” and “gutted” American industry, casting Beijing as a central foil he will run against in the remaining months of his re-election campaign.
    Trump appeared in the Rose Garden at the end of a week when the US hit 100,000 deaths in the coronavirus pandemic and as massive protests roiled Minneapolis after the death in police custody an African American man, but mentioned neither, focusing instead on casting Beijing as an existential geopolitical threat.

    China “ripping us off”, “gutting our factories”!? Please now, Mister Trump, suppose you are up for reelection …this will only hasten the decline of the US Dollar as the World’s Reserve Currency.
    The Digital Yuan will be tested ASAP and expanded to bypass the Funny Money of Uncle Sammie

    • When there is not enough energy to go around, there is increased competition in getting what is available. Cooperation goes downhill. People elect a president who will divide rather than unite; one who will break with old ways which are no longer working.

      There quickly become two sides: (1) The side who believe that BAU can exist indefinitely, if only people would make the proper choices, and (2) The side that reflect the reality of the situation. Some group needs to become a loser. You seem to side with (1)

      COVID-19 creates a similar problem. Some group is shut out of future consumption of goods and services by COVID-19. Clearly those who die are in this category. Those who lose their jobs may see greatly reduced consumption of future goods and services. Those who are treated receive a disproportionate share of present goods and services, leaving less goods and services created by energy resources for others.

      Shutdowns greatly reduce total goods and services produced, adding to the problem of falling goods and services per capita. As people are cut out of what they perceive as their fair share of goods and services, they tend to riot. Resentment of minorities (including the disabled) grows, because homogenous populations require far less energy to operate than heterogenous populations. Back before energy supplies per capita grew in the 1950 and 1960s, US blacks attended schools in their communities that were lower quality than whites attended in their communities. Those with disabilities mostly stayed home. The norm was two parent households. Divorces were difficult to obtain. Elderly relatives mostly lived with their families. Elderly and disabled without relatives moved to “poor farms” where they contributed whatever labor they could to growing food. It was inexpensive to operate schools in this situation, because classes were homogeneous. Health care was not fancy, so every community could have its own hospital. Beds could be used almost interchangeably for longer term care or more intensive care. Doctors could look for interactions between the relatively few drugs prescribed.

      Now our complex system is failing. We don’t have the old system to go back to. Violence seems to be the result.

      • Very Far Frank says:

        A very well put, impartial, analysis.

        • Herbie R Ficklestein says:

          Remember a while back in a comment post by Gail, if it weren’t for China, the USA would have collapse a long while ago…😳🚀so much for ripping us off..and stealing our jobs.

      • Xabier says:

        And one can observe that when emerging problems are discussed, experts and interest groups invariably now call for remedies which simply involve more expense and adding extra layers of complexity, exacerbating the situation….

  6. CTG says:

    From all the news in all forms (video or text) and from all sources (MSM, alternative, forums, etc), there might be a smidgen of chance that these kind of riots, be it provocated or not spreads far and wide all across USA. Partly due to economic issues and partly due to “nothing to do – unemployment” and partly due to “the fun of it”. The army, National Guard and police can come in with force to quell them but a few things to take note. I am not a USA citizen. Correct me if I am wrong

    1. There are just too many cities and it can even happen in smaller sized cities as well. Law enforcement may be stretched thin.

    2. Mass shooting by law enforcement, unlike in many countries, may cause a lot of political and social backlash. Dissent may be hidden but it is still boiling.

    3. I feel, unlike many years ago, the pot is now very close to boiling point (employment, economic depravity, social, etc) if not, even at boiling point a few months down when any recovery is not showing.

    4. Police high handedness and brutality is already raging below the surface all these years and all it needs is just a spark to cause the bonfire. Those who have been a victim of police injustice or brutality will surely join in and hit at the law enforcement. To them revenge is great to be serve “hot”

    5. I heard from my friends in USA that anger is running deep and high among citizens. If you are at the upper crust, then you will never know. If you are middle or middle lower, I would imagine the anger. I am not surprised at all if it happens in high end areas, they will smash or destroy icons of wealth like branded stores.

    All these will cause a lot more economic pain and will lower the velocity of money even more. Velocity money cannot go negative (as far as I know). It s effect is non-linear. As it approaches zero, it is like the speed of light, the effects will be very horrible. If there are riots in your city, are you in any mood to spend any money at all. The most you will be spending is groceries. You will also spend the most minimum of groceries and think twice if you want to indulge a little. You will be so hard pressed for time to leave the grocery store or you may not even leave your home. Deliveries or online groceries? It might not be delivered if the situation is turning from bad to worse.

    It is already very bad with the shutdown and loss of jobs. Add this riots in, it is another extra straw (perhaps a large bundle of straws) to the camel’s back. The camel is already so weak and half dead…….

    Any comments from those in USA? Just giving my points of view.

    • Ed says:

      Americans are cowards they will do nothing. There is no organized opposition and never will be. Any person or group that appears to be forming an effective opposition will be killed by the TPTB. As to people of color they are segregated by geographic area it will be “as easy as shooting fish in a barrel”. I expect zero change other than massive unemployment and starvation.

      • CTG says:

        There is no right or wrong. It is like a game that God play. Will this round be “cowards” or starvation? No one knows.

        • The issue is the extent of sharing, when there is not enough to go around. I agree; there are no right or wrong answers.

          Religions seem to represent interpretations of god’s will in a particular time and place. In a time when resources are very plentiful (increased trade, more resources than in the past), sharing makes sense. If starvation looks like it might be a possible outcome, sharing doesn’t make sense.

    • Violence is related to falling energy consumption per capita and which segments of the world economy will be affected disproportionately. Those being shut out tend to become violent.

    • Lidia17 says:

      CTG, are you asking seriously? A year ago, five years ago, ten years ago… there were as many videos of blacks “randomly” attacking whites and rampaging in stores as YouTube had hours in the day to censor them. You didn’t like your nail job? Smash all the nail-polish displays to the ground. Your child was shoplifting? Get into a fistfight with the shop-owner who protests. You think your chicken sandwich was served too cold? Shoot the fast-food worker.

      All groups do not exhibit similar behavior under similar conditions.

      Was it you who wrote that it was wise not to mention that a girlfriend was inferior at kissing? That’s what we are up against in the US, but we can’t say so out loud. Some folks are inferior at civilization, which (from a biological standpoint) is neither good nor bad, since civilization will be going away. So let the MENAs burn up all the catholic churches and all the cars in France.. all the cars and churches in Europe.. they are only fulfilling our collective thermodynamic destiny.

      Asia seems to be less burdened by political correctness in this regard. I have a great deal of respect for Gail, but race riots have been a fixture in the US for many decades: plenty of poor whites, Asians, and Latinos live in the US but they don’t tend to burn down their own neighborhoods when they have a grievance, real or perceived. These are just facts which are swept under the rug in order “not to make the black kids angry”.

      • Xabier says:

        And the behaviour of groups can worsen over time: in 1970’s and 80’s London the Jamaicans used to mug people a lot and occasionally stab them; but now the stabbings are very common, the savage multiple-type, and guns are widely used.

        In the 70’s there weren’t any ‘Mothers against Gun Crime’ posters -just not needed.

        Did the ‘oppression’ get worse? If you are ‘marginalised’ and unemployed in 1975 it must be much the same in 2020…..

    • Lidia17 says:

      Black looters are not “smashing icons of branded wealth”.. That’s privileged-white/antifa/Marxist rhetoric (and they may be assisting as provocateurs in some cases, as with the black bloc in Europe). Black looters just want the stuff that’s in the store! These events are not intellectually-motivated if not to the degree that they are instrumentalized politically by people who have very little in common with the actors on the ground.

  7. CTG says:

    I think we are really beyond the event horizon. Certain things cannot be done or said. The damage will be permanent. Not sure why people cannot understand that (CDP, FE?)

    Imagine when you date a girl and you are going to give her a good French kiss and in the midst, you say that your ex-girlfriend kissed better. The damage is this current girlfriend is going to be permanent. No matter how sincere or expensive is your apology, it will not help. That sentence should not be said even if it is true.

    The economic damage and the crashing velocity of money is similar to the kissing scene. If the virus were to disappear now, the trajectory has been set. Jobs are not coming back, people have no money to go restaurants or buy expensive items (you need a lot of people to buy a lot of things for the economy to go round, not just a bunch of people). If the number of patrons or customers is not sufficient, the business will still close down. This is a viscous cycle. I am not even sure how to break this cycle (I am thinking hard but still cannot find a way).

    Habits have changed, a big change in my country. People prefer to eat at home (for health, convenience, saves money and lazy to go out and lastly to prevent getting the virus). Travel channels is not appealing anymore since you cannot travel. Beauty is not really good now because you are going to wear a mask. Nails – do it at home. Hair – looks disheveled but so is everyone else. Clothes? people are still working from home in their pajamas. The number of people now, actually going out to buy office wear is non existence. Seriously, at this point in my country,looking beautiful is not even in the list of “to do”.

    It looks to me that this habit, which is causing big havoc economically is going to be permanent or least for the 6-12 months. Our economy, unfortunately, cannot wait 6-12 months for the change in habits.

    • frankly step-by-step says:

      I cannot confirm your assessment at the moment.
      Was in the neighboring town at lunchtime. It is a tourist town in Germany on the Moselle.
      An almost normal weekend operation in late May, as in previous years.
      Hardly anyone wears a mask outdoors.
      The restaurants are occupied. At least the seats that still exist. (Because of the distance, less than before)
      Good. The hotel ships are missing. The bus travelers too.
      But probably more day and weekend travelers.
      All of this may change in the next few months.
      At the moment it seems that people in Germany believe that they have it behind them. The worst anyway.

      Who wants to convince himself. a link to the Moselle webcam.
      https://www.mosel-webcams.de/bernkastel-webcam/

    • Also, the idea that we must reduce energy consumption by “reduce, reuse, recycle” goes away. Disposables are seen as what prevents transmission of COVID-19. Recycled air in offices, ships, airplanes and elsewhere appeared to be energy efficient in the past, but now seems to be a way of transmitting viruses around. Public transport was all the rage; now bicycles seem to be the in thing.

    • Xabier says:

      Lots of British girls out today with tons of make-up and fairly dressed up: but of course masks aren’t compulsory here.

      Curiously, those I dd see with masks were all under 30, and mostly female. But only about 5% of people, probably less.

      So many men have shaven heads that the lack of professional hair care doesn’t notice much – learnt to cut mine pretty well over the last few months. Goodbye barber!

      I would agree that changes have been set in motion that even a total disappearance of the virus and restrictions cannot avert.

  8. Rodster says:

    Uh oh, where’s FE? Did he get bored with this place?

    • Covidinamonthorayearoradecade says:

      “Fast Eddy says:
      May 29, 2020 at 5:33 pm
      Read comments re the ryots in the US on ZH — seems like we have the same people commenting on OFW.

      I don’t generally read the ZH comments because it makes me sick — and it also frustrates me because this extinction is taking far too long to play out.

      We’re done with comments here for the time being”

      so what do you think?

      I think by “frustrates me” that he is saying his seeeecret plan (that seemed to often change) has failed to be supported by the actual events of the past few months…

      I, on the other hand, have no problem facing the actual reality that has been unfolding this year…

      I wish the mass starvation wasn’t coming, but it was going to happen someday due to overshoot… the C19 catalyst, which spurred the illlogical lockdown overreactions, just accelerated the scenario…

      but mass starvation is not the end of the world…

      Q2 depression… perhaps slightly better by Q3 or Q4…

      I’m patient… time will tell…

      • Lidia17 says:

        I like the back&forth here between the patient and the impatient. My husband was just giving me grief because, six years ago, I told an old friend and colleague that I saw collapse happening “within ten years”. Husband looks around and everything seems to be working, as far as he is concerned.

        Patience, grasshopper.

  9. Marco Bruciati says:

    Country most fucked. Usa. Italia. Brazil. South Africa. India. Russia. Argentina. Ecuador. . Only fucked all the rest

    • Covidinamonthorayearoradecade says:

      and your English is improving… 😉

      good job…

      (I don’t know any other language, so you beat me there…)

      • Lidia17 says:

        Right,, just keep using the word “fuck” a lot! To use a phrase of my dear, departed mother: “it covers a multitude of sins”.

        • Tim Groves says:

          My mother wouldn’t let the f word into the house. And the other f word—fornicate—doesn’t have anything like the same punch or the same all purpose versatility, so we were verbally restricted in our family.

        • Lidia17 says:

          Oh, no, sorry, that comment wasn’t clear… it wasn’t the “F” word my mom was talking about.. it was more a saying she had bout something like a loose sweater that would hide flab. I heard it from her repeatedly, and somehow it came to mind when someone said Marco’s English had improved, coincident with his colorful language.

          I remember my mom scolding me my first summer coming home from college, when I talked about there being “crud” in the kitchen sink. “Crud” was not an acceptable word in our house!

    • Chrome Mags says:

      Certainly going to be rough, Marco. India’s daily new cases keeps ratcheting up with India working its way up the list of countries with the most cases. That is a country that may end up near or at the top of the list given enough time, as the virus particularly likes congested, high population cities. Not much chance to social distance when so many live in close quarters in most homes.

      • Chrome Mags says:

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

        In fact, click on that link and scroll down to the bar graph showing the daily new cases for India. Just keeps moving up with no sign of slowing down. Another country doing the same is Bangladesh where people also have numerous people living in each structure.

        Part of this virus is the math of it. A lot of people discount the virus because the numbers don’t seem all that high compared to other ways people can die, however, this is still early in the development of this as a pandemic, just a few months into it. Time, pressure, infections and math will determine how much of a problem this becomes. Also, we don’t know how the virus will respond to attempts to treat or vaccinate against it. Once challenged it could alter in a way that makes it even more difficult.

        • Xabier says:

          Yes, people are talking as if it is done and dusted and we can judge which countries have done well (Germany, Taiwan, S Korea) and which have failed (US, UK, Spain) etc.

          That it is only the very beginning – or a Churchillian ‘end of the beginning’ – seems to escape them.

          The best thing to do now is to take a pause, relax a bit, and think hard about how to face all the dangers likely to come after this summer.

          They seem to be growing in number and severity, and deaths form COVID will probably be the smallest part of it.

        • Relative to population, India and Bangladesh have very few reported COVID-19 cases compared to the US. They are somewhat above Japan. I expect that underreporting is a major issue, however.

  10. Yoshua says:

    Obama is the king maker in the Democratic party today. Joe Biden was Obama’s choice for presidential candidate and Kamal Harris is his choice for vice president (will be announced soon).

    The protests in the US are not organic, they are organised and planed years ago.

    This is election year.

    All above according to Albert (Live Monitor).

    https://mobile.twitter.com/amlivemon/status/1266717680322711553

    • Yoshua says:

      The second part of the tweet.

      https://mobile.twitter.com/amlivemon/status/1266717684475011074

      I don’t know much above is true, or who is organising the protests. But if even partly true, then they playing with fire.

      But if there’s not enough for everyone to go around, then they will have to fight over what’s left?

    • john Eardley says:

      These riots have nothing to do with perceived racial injustice or relative poverty. Certainly the Democrats have fermented racial hatred for decades for their own political gains. However the are now losing control to the communists and anarchists of Black Lives Matter and Antifa who are the ones rioting.

    • Covidinamonthorayearoradecade says:

      Kamala Harris:

      a woman… check…

      black… check…

      that checks all the boxes…

      • Tim Groves says:

        Likes to boss people around: Check.

        Loves banging up disadvantaged petty felons and locking them up for decades: Check

      • Robert Firth says:

        How about a third box: competent? no check. Now twitter can delete my account for telling the truth.

    • Lidia17 says:

      There is little question that the “blacks” you mention are very far from having risen up organically from the US population. Kamala Harris seemed pretty loathed by black Dems due to her prosecutorial bkgd. (smoking pot ok for me, but not for thee).

      But, as Biden is wont to say, she is “bright and clean and a nice-looking [gal].. I mean, that’s a storybook, man.”

    • Lidia17 says:

      Plus, Yoshua.. Obama is not a kingmaker. He is the errand-boy of king-makers, as I think you well know.

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