COVID-19 and the economy: Where do we go from here?

The COVID-19 story keeps developing. At first, everyone listened to epidemiologists telling us that a great deal of social distancing, and even the closing down of economies, would be helpful. After trying these things, we ended up with a huge number of people out of work and protests everywhere. We discovered the models that were provided were not very predictive. We are also finding that a V-shaped recovery is not possible.

Now, we need to figure out what actions to take next. How vigorously should we be fighting COVID-19? The story is more complex than most people understand. These are some of the issues I see:

[1] The share of COVID-19 cases that can be expected to end in death seems to be much lower than most people expect.

Most people assume that the ratios of deaths to cases by age group, computed using reported cases, such as those included in the Johns Hopkins Database, give a good indication of the chance of death a person faces if a person catches COVID-19. In fact, the cases reported to this database are far from representative of all cases; they tend to be the more severe cases. Cases with no symptoms, or only very slight symptoms, tend to be missed. The result is that ratios calculated directly from this database make people think their risk of death is far higher than it really is.

The US Center for Disease Control has published Planning Scenarios, based on information available on April 29, 2020.* Using this information, the CDC’s best estimate of the number of future deaths per 1000 cases with symptoms is as follows:

Ages 0 – 49    0.5 deaths per 1000 cases with symptoms

Ages 50-64    2.0 deaths per 1000 cases with symptoms

Ages 65+       13.0 deaths per 1000 cases with symptoms

The CDC’s best estimate is that 35% of cases have no symptoms at all. Thus, if we were to include these cases without symptoms in the chart above, the chart would become:

Ages 0-49   0.5 deaths per 1,538 cases (including those without symptoms), or 0.3 deaths per 1000 cases with or without symptoms

Ages 50-64  1.3 deaths per 1000 cases with or without symptoms

Ages 65+    8.5 deaths per 1000 cases with or without symptoms

A recent study of blood samples from 23 different parts of the world came to a similarly low estimate of the number of deaths per 1000 COVID-19 infections. It reported that among people who are less than 70 years old, the number of deaths per 1000 ranged from 0.0 to 2.3 per 1000, with a median of 0.4 deaths per 1000.

The same paper remarks,

COVID-19 seems to affect predominantly the frail, the disadvantaged, and the marginalized – as shown by high rates of infectious burden in nursing homes, homeless shelters, prisons, meat processing plants, and the strong racial/ethnic inequalities against minorities in terms of the cumulative death risk.

[2] There seem to be things we can do ourselves to reduce our personal chance of serious illness or death.

General good health is protective against getting a bad case of COVID-19. Thus, anything that we can do in terms of a good diet and exercise is likely helpful. Staying inside for weeks on end in the hope of preventing exposure to COVID-19 is probably not helpful.

Continued exposure to huge amounts of disinfectants and hand sanitizers is likely not to be helpful either. Our bodies depend on healthy microbiomes, and products such as these adversely affect our microbiomes. They kill good and bad bacteria alike and may leave harmful residues. It is easy to scale back our personal use of these products.

There are recent indications that vitamin D is likely to be protective in reducing both the incidence of COVID-19 and the disease’s severity. Web MD reports:

Several groups of researchers from different countries have found that the sickest patients often have the lowest levels of vitamin D, and that countries with higher death rates had larger numbers of people with vitamin D deficiency than countries with lower death rates.

Experts say healthy blood levels of vitamin D may give people with COVID-19 a survival advantage by helping them avoid cytokine storm, when the immune system overreacts and attacks your body’s own cells and tissues.

While we don’t know for certain that vitamin D is helpful, there is certainly enough circumstantial evidence to suggest that it would likely be worthwhile to raise vitamin D levels to the amount recommended by the National Institute of Health (30 nmol/L or higher). People with dark skin living in areas away from the equator might especially be helped by this strategy, since dark skin reduces vitamin D production.

Masks seem to be helpful in preventing the spread of infection. A person’s own immune system can handle some level of germs. If two people meeting together both wear masks, the combination of masks can perhaps reduce the level of germs to within the amount the immune system can handle. Our immune systems are built to handle a barrage of small attacks by viruses and bacteria. Continued “practice” with relatively low combinations of good and bad bacteria (as occur with masks) will tend to build up our bodies’ natural defenses.

We see dentists and dental hygienists wearing face shields. These shields are readily available over the internet and can be worn with a mask or by themselves. We don’t yet know precisely how much protection they provide, but early models suggest that they can be helpful in two directions: (a) preventing the wearer’s droplets from harming others and (b) reducing the droplet exposure from others. Thus, they may be a worthwhile way to reduce exposure to the virus causing COVID-19, even when others are not wearing masks.

[3] The medical community’s ability to treat COVID-19 cases keeps improving.

There seem to be many small changes that are improving treatment of COVID-19. If patients are having trouble getting enough oxygen, having them lie on their stomachs seems to increase their blood oxygen levels. The cost of this change is pretty much zero, but it keeps people out of the ICU longer.

Originally, planners thought that ventilators would be needed for patients with COVID-19, since ventilators are often used on pneumonia patients. Experience has shown, however, that oxygen plus something like a CPAP machine often works better and is less expensive.**

The simple change of not sending recuperating patients to nursing home-type facilities for the last stages of care has proven helpful, as well. Many of these patients can still infect others, leading to infections in long-term care facilities. Tests to tell whether patients are truly over the disease do not seem to be very accurate.

Last week, it was announced that treatment with an inexpensive common steroid could reduce deaths of people on ventilators by one-third. It could also reduce deaths of those requiring only oxygen treatment by 20%. Using this treatment should significantly reduce deaths, at little cost.

We can expect improvements in treatments to continue as doctors experiment with existing treatments, and as drug companies work on new solutions. Looking at cumulative historical mortality rates tends to overlook the huge learning curve that is taking place, allowing mortality rates to be lower.

[4] More doubts are being raised about quickly finding a vaccine that prevents COVID-19. 

The public would like to think that a vaccine solution is right around the corner. Vaccine promoters such as Anthony Fauci and Bill Gates would like to encourage this belief. Unfortunately, there are quite a few obstacles to getting a vaccine that actually works for any length of time:

(a) Antibodies for coronaviruses tend not to stay around for very long. A recent study suggests that even as soon as eight weeks, a significant share of COVID-19 patients (40% of those without symptoms; 12.9% of those with symptoms) had lost all immunity. A vaccine will likely face this same challenge.

(b) Vaccines may not work against mutations. Beijing is now fighting a new version of COVID-19 that seems to have been imported from Europe in food. Early indications are that people who caught the original Wuhan version of the COVID-19 virus will not be immune to the mutated version imported from Europe.

Vaccines that are currently under development use the Wuhan version of the virus. The catch is that the version of COVID-19 now circulating in the United States, Europe and perhaps elsewhere is mostly not the Wuhan type.

(c) There is a real concern that a vaccine against one version of COVID-19 will make a person’s response to a mutation of COVID-19 worse, rather than better. It has been known for many years that Dengue Fever has this characteristic; it is one of the reasons that there is no vaccine for Dengue Fever. The earlier SARS virus (which is closely related to the COVID-19 virus) has this same issue. Preliminary analysis suggests that the virus causing COVID-19 seems to have this characteristic, as well.

In sum, getting a vaccine that actually works against COVID-19 is likely to be a huge challenge. Instead of expecting a silver bullet in the form of a COVID-19 vaccine, we probably need to be looking for a lot of silver bee-bees that will hold down the impact of the illness. Hopefully, COVID-19 will someday disappear on its own, but we have no assurance of this outcome.

[5] The basic underlying issue that the world economy faces is overshoot, caused by too high a population relative to underlying resources.

When an economy is in overshoot, the big danger is collapse. The characteristics of overshoot leading to collapse include the following:

  • Very great wage disparity; too many people are very poor
  • Declining health, often due to poor nutrition, making people vulnerable to epidemics
  • Increasing use of debt, to make up for inadequate wages and profits
  • Falling commodity prices because too few people can afford these commodities and goods made from these commodities
  • Gluts of commodities, causing farmers to plow under crops and oil to be put into storage

Thus, pandemics are very much to be expected when an economy is in overshoot.

One example of collapse is that following the Black Death (1348-1350) epidemic in Europe. The collapse killed 60% of Europe’s population and dropped Britain’s population from close to 5 million to about 2 million.

Figure 1. Britain’s population, 1200 to 1700. Chart by Bloomberg using Federal Reserve of St. Louis data.

We might say that there was a U-shaped population recovery, which took about 300 years.

A later example that almost led to collapse was the period between 1914 and 1945. This was a period of shrinking international trade, indicating that something was truly wrong. On Figure 2 below, the WSJ calls its measure of international trade the “Trade Openness Index.” The period 1914-1945 is highlighted as being somewhat like today.

Figure 2. The Trade Openness Index is an index based on the average of world imports and exports, divided by world GDP. Chart by Wall Street Journal.

Many of the issues in the 1914-1945 timeframe were coal related. World War I took place when coal depletion became a problem in Britain. The issue at that time was wages that were too low for coal miners because the price of coal would not rise very high. Higher coal prices were needed to offset the impact of depletion, but high coal prices were not affordable by citizens.

The Pandemic of 1918-1919 killed far more people than either World War I or COVID-19.

World War II came about at the time coal depletion became a problem in Germany.

Figure 3. Figure by author describing peak coal timing compared to World War I and World War II.

The problem of inadequate energy resources finally ended when World War II ramped up demand through more debt and through more women entering the labor force for the first time. In response, the US began pumping oil out of the ground at a faster rate. Instead of depending on coal alone, the world began depending on a combination of oil and coal as energy resources. The ratio of population to energy resources was suddenly brought back into balance again, and collapse was averted!

[6] We are now in another period of overshoot of population relative to resources. The critical resource this time is oil. The alternatives we have aren’t suited to fulfilling our most basic need: the growing and transportation of food. They act as add-ons that are lost if oil is lost.

If we look back at Figure 2 above, it shows that since 2008, the world has again fallen into a period of shrinking imports and exports, which is a sign of “not enough energy resources to go around.” We are also experiencing many of the other characteristics of an overshoot economy that I mentioned in Section 5 above.

Figure 4 shows world energy consumption by type of energy through 2019, using recently published data by BP. The “Other” combination in Figure 4 includes nuclear, hydroelectric, wind, solar, and other smaller categories such as geothermal energy, wood pellets, and sawdust burned for fuel.

Figure 4. World energy consumption by fuel, based on BP’s 2020 Statistical Review of World Energy.

Oil has been rising at a steady pace; coal consumption has been close to level since about 2012. Natural gas and “Other” seem to be rising a little faster in the most recent few years.

If we divide by world population, the trend in world energy consumption per capita by type is as follows:

Figure 5. World Per Capita Energy Consumption based on BP’s 2020 Statistical Review of World Energy

Many people would like to think that the various energy sources are substitutable, but this is not really the case, as we approach limits of a finite world.

One catch is that there are very few stand-alone energy resources. Most energy resources only work within a framework provided by other energy sources. Wood that is picked up from the forest floor can work as a stand-alone energy source. Wind can almost be used as a stand-alone energy source, if it is used to power a simple sail boat or a wooden windmill. Water can almost be used as a stand-alone energy source, if it can be made to turn a wooden water wheel.

Coal, when its use was ramped up, enabled the production of both concrete and steel. It allowed modern hydroelectric dams to be built. It allowed steam engines to operate. It truly could be used as a stand-alone energy source. The main obstacle to the extraction of coal was keeping the cost of extraction low enough, so that, even with transportation, buyers could afford to purchase the coal.

Oil, similarly, can be a stand-alone energy solution because it is very flexible, dense, and easily transported. Or it can be paired with other types of less-expensive energy, to make it go further. We can see our dependence on oil by how level energy consumption per capita is in Figure 5 since the early 1980s. Growth in population seems to depend upon the amount of oil available.

As I have mentioned in previous posts, the economy is a self-organizing system. If there isn’t enough of the energy products upon which the economy primarily depends, the system tends to change in very strange ways. Countries become more quarrelsome. People decide to have fewer children or they become more susceptible to pandemics, bringing population more in line with energy resources.

The problem with natural gas and with the electricity products that I have lumped together as “Other” is that they are not really stand-alone products. They cannot grow food or build roads. They cannot power international jets. They cannot build wind turbines or solar panels. They cannot put natural gas pipelines in place. They can only exist in a complex environment which includes oil and perhaps coal (or other cheaper energy products).

We are kidding ourselves if we think we can transition to modern fuels that are low in carbon emissions. Without high prices, oil and coal that are in the ground will tend to stay in the ground permanently. This is the serious obstacle that we are up against. Without oil and coal, natural gas and electricity products will quickly become unusable.

[7] A major problem with COVID-19 related shutdowns is the fact that they lead to very low commodity prices, including oil prices. 

Figure 6. Inflation-adjusted monthly average oil prices through May 2020. Amounts are Brent Spot Oil Prices, as published by the EIA. Inflation adjustment is made using the CPI-Urban Index.

Oil is the primary type of energy used in growing and transporting food. It is used in many essential processes, including in the production of electricity. If its production is to continue, its price must be both high enough for oil producers and low enough for consumers.

The problem that we have been encountering since 2008 (the start of the latest cutback in trade in Figure 2) is that oil prices have been falling too low for producers. Now, in 2020, oil production is beginning to fall. This is happening because producing companies cannot afford to extract oil at current prices; governments of oil exporting countries cannot collect enough taxes at current prices. They hope that by reducing oil supply, prices will rise again.

If extraordinarily low oil prices persist, a calamity similar to the one that “Peak Oilers” have worried about will certainly occur: Oil supply will begin dropping. In fact, the drop will likely be much more rapid than most Peak Oilers have imagined, because the drop will be caused by low prices, rather than the high prices that they imagined would occur.

Amounts which are today shown as “proven reserves” can be expected to disappear because they will not be economic to extract. Governments of oil exporting countries seem likely to be overthrown because tax revenue from oil is their major source of revenue for programs such as food subsidies and jobs programs. When this disappears, governments of oil exporters are forced to cut back, lowering the standard of living of their citizens.

[8] What our strategy should be from now on is not entirely clear.

Of course, one path is straight into collapse, as happened after the Black Death of 1348-1352 (Figure 1). In fact, the carrying capacity of Britain might still be about 2 million. Its current population is about 68 million, so this would represent a population reduction of about 97%.

Other countries would experience substantial population reductions as well. The population decline would reflect many causes of death besides direct deaths from COVID-19; they would reflect the impacts of collapsing governments, inadequate food supply, polluted water supplies, and untreated diseases of many kinds.

If a large share of the population stays hidden in their homes trying to avoid COVID, it seems to me that we are most certainly heading straight into collapse. Supply lines for many kinds of goods and services will be broken. Oil prices and food prices will stay very low. Farmers will plow under crops, trying to raise prices. Gluts of oil will continue to be a problem.

If we try to transition to renewables, this leads directly to collapse as well, as far as I can see. They are not robust enough to stand on their own. Prices of oil and other commodities will fall too low and gluts will occur. Renewables will only last as long as (a) the overall systems can be kept in good repair and (b) governments can support continued subsidies.

The only approach that seems to keep the system going a little longer would seem to be to try to muddle along, despite COVID-19. Open up economies, even if the number of COVID-19 cases is higher and keeps rising. Tell people about the approaches they can use to limit their exposure to the virus, and how they can make their immune systems stronger. Get people started raising their vitamin D levels, so that they perhaps have a better chance of fighting the disease if they get COVID-19.

With this approach, we keep as many people working for as long as possible. Life will go on as close to normal, for as long as it can. We can perhaps put off collapse for a bit longer. We don’t have a lot of options open to us, but this one seems to be the best of a lot of poor options.

Notes:

*The CDC estimates are estimates of future deaths per 1000 cases. Thus, they probably reflect the learning curve that has already taken place. It is unlikely that they reflect the benefit of the new steroid treatment mentioned in Section 3, because this finding occurred after April 29.

**I have been told that disease spread can be a problem when using CPAP machines, however. Using ventilators at very low pressure settings seems also to be a solution.

 

 

 

This entry was posted in Financial Implications and tagged , , , , , by Gail Tverberg. Bookmark the permalink.

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.

2,824 thoughts on “COVID-19 and the economy: Where do we go from here?

    • “United Airlines warned employees for months that mass layoffs loomed if travel didn’t rebound, and the airline put a grim face on the expected tally Wednesday.

      “In a memo to employees, the Chicago-based airline said 36,000 employees, or 45% of its front-line workers in the USA and more than a third of its overall workforce of 95,000, face layoffs on or around Oct. 1.”

      https://eu.usatoday.com/story/travel/airline-news/2020/07/08/united-airlines-layoff-up-36-000-employees-october-coronavorus-fallout/5396857002/

      • “…housing courts are reopening, and eviction moratoriums are expiring in the coming weeks, if they haven’t already. CARES Act benefits that expanded unemployment are running out. Unless lawmakers intervene, the $600-per-week supplement will expire at the end of July.

        ““The United States is facing an eviction crisis of biblical proportions,” Aaron Carr, founder and executive director of the Housing Rights Initiative, a nonprofit housing watchdog group, told me.”

        https://www.vox.com/21301823/rent-coronavirus-covid-19-housing-eviction-crisis

        • The inability to pay for housing without wages is a huge problem. Either a lot of people will lose their housing, or a lot of banks and others holding debt, will find impossibly high default rates. Asset values of the underlying structures will likely shrink as well, because no one can afford to buy them.

          • Good point. But we are still building like mad here in Maryland. Construction work is deemed essential during lockdown.

          • this complex housing issue may devolve in the near future.

            renters who can no longer afford rent perhaps will move in with friends or back home to Mom or Dad’s house.

            landlords with half empty buildings may default on their loans.

            banks could be left with that bad debt, and/or left owning a half empty apartment building.

            apartment buildings could mostly be unprofitable, and so their value as an asset could drop towards zero.

            as this devolves, the only solution might be for government to take over all these worthless assets that some people probably still want to live in.

            a new type of “public housing” program?

            in addition, government will have to send money to the banks, to save them from their position of owning these worthless assets.

            or…

            let this self-organize through free enterprise.

            either way, it’s a mess.

            • it’s another topic, but I’ll repeat that I expect a sort of similar scenario with the FF industry, where much or all of it might be nationalized.

              the government could become the owner of the FF assets which could soon be heading to a similar position as worthless assets.

              the banks who are holding the bag on loans to this industry will be “paid”, and the government will produce the FF without any thought of profits and losses.

              as the economy devolves, government might be owning lots of apartment buildings and FF companies.

              or let it all self-organize, and good luck with that.

  1. “The rift between the United States and China threatens to become a chasm…. This rapid descent into conflict has taken many by surprise.

    “For most of this century, Sino-U.S. competition was moderated by the need to work together on a range of global economic, financial, and geopolitical issues that mandated cooperation. But these cooperative impulses have almost entirely disappeared…”

    https://thediplomat.com/2020/07/the-us-china-cold-war-has-already-started/

    • “The deployment of three US nuclear-powered aircraft carriers to the South China Sea have further tested strained relations between China and the United States.

      “The US naval exercises represent an enormous aggregation of firepower. Adding to tensions, the US deployment coincides with Chinese war games in the same vicinity.”

      https://theconversation.com/naval-exercises-in-south-china-sea-add-to-growing-fractiousness-between-us-and-china-142168

      • “The director of the FBI has said that acts of espionage and theft by China’s government pose the “greatest long-term threat” to the future of the US…

        “He said China had begun targeting Chinese nationals living abroad, coercing their return, and was working to compromise US coronavirus research.

        “”The stakes could not be higher,” Mr Wray said.”

        https://www.bbc.co.uk/news/world-us-canada-53329755

    • That Crossroads video I posted yesterday suggests there is no threat about it. I might go back and add some more detail of what the video said the CCP plans to do, but it looked to me like they are planning to severe economic links with the USA as much as possible, in due course and be rid of the US dollar.

    • “Sudan began loosening lockdown measures Wednesday in and around the capital after three months of tight restrictions due to the coronavirus pandemic…

      “The confinement measures have compounded Sudan’s economic crisis, characterised by galloping inflation and foreign currency shortages… On Wednesday, many in local markets complained of dramatic rises in the prices of basic foodstuffs.”

      http://english.ahram.org.eg/NewsContent/2/8/374021/World/Region/Sudan-eases-lockdown-measures-as-economic-crisis-e.aspx

        • ““Over the past decade, the UN, world leaders and pundits have promoted a self-congratulatory message of impending victory over poverty, but almost all of these accounts rely on the World Bank’s international poverty line, which is utterly unfit for the purpose of tracking such progress,” said Australian academic Philip Alston.

          “The expert condemned the near universal reliance on the bank’s line, which he said is deeply flawed and yields a deceptively positive picture.””

          https://www.theguardian.com/global-development/2020/jul/07/we-squandered-a-decade-world-losing-fight-against-poverty-says-un-academic

          • From the report: “support for poverty elimination has largely evaporated.” Perhaps because people are finally beginning to realise that poverty eradication is impossible in a world with uncontrolled population growth and steadily diminishing natural resources. But a lot of organisations, public and private, have made immense profits by not eradicating poverty.

        • Gail, I disagree. The problem is too many people competing for what is available. And the only solution is to bring the consumption side back in balance with the production side.

          • “Gail, I disagree. The problem is too many people competing for what is available.”

            That’s another way of saying, ‘not enough to go around’.

            • yes, right now there is enough food for everyone, if only it could be evenly distributed.

              but soon there won’t be enough net (surplus) energy to produce the amount of food necessary for the growing population.

              and if we keep everyone well fed now, the population will increase at an even faster rate, ergo in the long run more will starve.

              what did Ghandi say about that conundrum?

              and what did he say about the imminent decrease of net (surplus) energy?

              I somehow missed his thoughts on those issues.

            • Very modest living, based on vegetarianism plus goat’s milk, traveling third class, and making all one’s own clothes was his basic recipe, if I recall correctly.

              I’m sure Greta and Gandhi would have gotten on famously.

              Oh, and he was dead against vaccination. His stance makes RFK Jnr. look like a namby-pamby moderate on that issue.

            • I guess he was ‘for’ millions of kids in screaming agony and crippled with polio
              (as no doubt all anti vaxxers are)

              I believe the last pockets of it are still to be found on the Indian sub continent

            • There is quite a distance between getting a vaccine for polio, and giving 12 yr olds vaccines for HPV because they will be sexually active at that age.

    • Unless the virus morphs into something considerably more deadly, no ‘could’ kill more people about it. Will.

    • “Hunger linked to the fallout from the COVID-19 pandemic could kill more people than the disease itself, Oxfam has warned… The bleak scenario is outlined in its report, The Hunger Virus, and equates to as many as 12,000 people dying per day.”

      This is what many, just to name two (Gerald Celente and Martin Armstrong) in the alternative media have been saying. That the stoo-pid, knee jerk response would kill more than the virus itself. Unsurprisingly the Elite are talking another round of lockdowns while they “try to understand” why the eCONomy is coming apart at the scene and why people are losing it and rioting.

      Martial Law is next in the USSA and the way the Elite are playing its citizens, they will be begging for it.

      “Never let a serious crisis go to waste” – Rahm Emanuel

    • Most people still don’t see the connection between their personal decision to stay home and buy nothing and the global hunger problem, however.

      • We should write a Book titled: “How to Collapse A Global eCONomy in Three Easy Steps”

        Must be a good payout and or the UK Gov’t is paying for their redundancy.

      • I am sure those who volunteer to leave expect to have other sources of income to replace what they are losing, such as pensions or unemployment insurance.

      • It is beginning to look like maybe Airbus and Boeing will not exist in a year’s time. They can hardly wait around a year or several twiddling their thumbs waiting for orders to come in.

      • A new airline is starting up in Armenia, called “Fly Armenia Airlines.” It plans to primarily serve the Armenian diaspora, but there was talk of adding flights to Beijing and Shanghai later. (The virus situation in Armenia is about as bad as in the USA, considered on a per capita basis.) It couldn’t be very hard to buy a couple of planes.

        • Maybe we can figure out how to use the leftover planes for other things as well. For example, housing for the homeless. Of course, people expect the economy to soon recover.

  2. Gold $1,800…Yeps!
    From the Wall Street Journal
    So far, signs of inflation from disrupted supply chains or aggressive monetary support have been largely absent. But even if inflation were to tick higher, reducing real yields further, it is difficult to imagine the Fed raising interest rates, given parlous economic conditions generally.
    Another factor to consider: Who is buying all this gold? Inflows into gold exchange-traded funds in the first half were the largest ever, and largely from North America. Flows into gold from institutional investors in developed markets have predominated, with emerging-market demand comparatively weak, Goldman Sachs researchers note. They expect a pickup in the latter as consumer demand improves in developing economies later this year.
    And while it’s possible developed economies will recover faster than expected, recent surges in U.S. cases show the limits to reopening during a pandemic. Some parts of the world that had kept cases down, like Australia, are experiencing second-wave wobbles.
    A negative case for the price of gold would require a much more optimistic economic outlook, or an unlikely shift in focus from major central banks. Without either it’s hard to see gold falling much, and it’s not unreasonable to believe it will reach new highs in the months ahead.
    Yeps, US Deficit in the month of JUNE almost equals ALL😥of the year 2019! WSJ🤑

    Yo, once in a lifetime opportunity, from MarketWatch
    ‘I know you’re not supposed to say this, but it’s a once-in-a-lifetime opportunity. You’re not going to see this again: Where you’ve actually got an economy that’s fine, and you’ve got a Fed pumping trillions of dollars in.’
    That’s Marc Lasry, hedge-fund manager and billionaire co-owner of the Milwaukee Bucks, explaining his stance on the investment landscape in a chat Wednesday on Yahoo Finance.
    While stocks should also fare well in the scenario he described, Lasry said it’s debt investors like himself who are poised to do “extremely well” making loans to companies that falter.
    His $14-billion Avenue Capital firm has capitalized on such struggling brands as Hertz HTZ , Macy’s M and J.C. Penney JCP .
    …..Bankruptcies represent good opportunities to buy from noneconomic sellers or people who need to sell, Lasry told Barron’s in an interview last month. That’s where Avenue Capital comes in.
    “If things turn out, I will do exceptionally well. If a company has to liquidate that’s OK, because I’ll make money on the liquidation,” he said at the time.
    Lasly also suggested the economy is better positioned to weather the storm brought on by the coronavirus than it was in the face of the collapse in 2008.
    https://www.marketwatch.com/amp/story/the-coronavirus-has-given-investors-a-once-in-a-lifetime-opportunity-says-hedge-fund-billionaire-2020-07-08

    Once man’s financial diaster, is another man’s gold mine…go figure…
    Like Clint Eastwood said in the Movie, The Good. The Bad. And the Ugly..
    There are those that dig the hole for the grave, and there are those that provide the shovel…
    Or words to the same
    PS. Very sad post of Mister McGibbs about the Middle Class of Lebanon, now resorting to savaging to survive….

    • People don’t just buy gold as a hedge against inflation; they buy it as a hedge against the system collapsing, hoping that gold will be tradable, when nothing else is.

      The hope is that if the regime becomes too oppressive, or bandits become a problem, a person can “buy” his way out of the problem. In terms of buying a loaf of bread or a piece of meat, gold coins would seem to be overkill. There is a serious question whether they would be useful for paying rent or taxes. Governments tend to confiscate gold, when it is seen as a threat.

      • Criminals and the desperate would no doubt conclude that a man with one gold coin would have several.

        That being so they would probably be intent on liberating the others with extreme prejudice.

        I did see the trick of only selling one’s precious ‘one and only’ wedding ring, never to the same buyer of course, as a way of evading such problems – at best one might be expected o have two such rings.

        But whoever hoarded only one coin or bar?

        • Thieves are one big concern, if a person starts using gold coins. If there is one, there must be more!

          Silver coins always seem more practical to me, if anything works.

      • The trick with gold is that the system only semi collapses and parts remain functional. In this case gold really could go to $5,000 or $20,000 an ounce. All of the existing gold stock in the world is 22 cubic meters, so it would basically fit inside of the average home. The gold would weigh around 140,000 tons and cost about $28,800 per pound at current prices = $8 Trillion dollars. A few central banks could easily buy all the gold in existence, pushing prices into the stratosphere. And imagine how strong of hands those holders would be?

        So here’s my play. I keep a small amount of physical as insurance but I also am levered to paper assets on the stock market. Gold mining, streaming, and royalty companies trade at a multiple to the price movement of the metal. So when gold moves up 1% in price a gold mining company will often move 3 or 5%. You can further lever this by trading in options contracts as opposed to share of a mining company by another 10 to 1. So when the price of the gold miner moves 1% your option moves 10%.

        The next time they announce a stimulus package gold will easily move up 5 or 10%, sending the miners up 20 or 30% and sending the options contracts up 150 or 300%. I’ve already done this several times but am waiting for a moonshot where gold moves up like some of these bankrupt stocks and takes off 20 or 40% in a day.

        • Good luck on the system semi-collapsing and somehow allowing gold to work as a currency. Presumably you are thinking that you would live in a country whose own system has not collapsed, so markets still work. I am still having a hard time seeing how its price would be bid up so high, though. Presumably, barter is always an option: I will give you apples and peanuts, if you will give me potatoes in return. Then, a person is getting something clearly of value in return.

          If food is in short supply, I would expect it would go to someone with a supply of food to exchange, not gold to exchange. Food can be eaten; gold cannot not be eaten.

          • Well the system is in a state of collapse or degrowth right now and gold is at 9 year highs. So right now my investment is working out splendidly. How long will it hold or how high gold goes before the wheels fall off? Well probably $3,000 an ounce if I had to guess but who really knows. Fingers crossed that things stay glued together for a few more years somehow.

            • The gold price could reach $3,000. I don’t know. The trick is to figure out when it is at the top, and buy available things with it then.

          • I read about a form of barter among English farmers in the very hard years of the 1930’s, making deals over grazing, exchanging surpluses of hay, wood, etc, among themselves.

            They had a rough idea of the ‘value’ of what they were exchanging, trusted one another but no money changed hands.

            There was also a very interesting survival of the gift economy which followed the pig-killings in the winter months. It must have been so common once that no one thought to write about it – in the fairly huge amount of reading I have done on the subject it’s only ever mentioned once.

            Once the meat for the family had been set aside, neighbors would be sent gifts of various nice bits -graded according to their merit – as thanks for help over the past year, and also to poorer, sick or elderly people; but only to those with good characters and who were respected. Bad characters, drunks, etc, got nothing.

            So the sight of the daughters of the house running about with pork on plates covered with a linen napkin was common at that time of year. It cemented good relations, oiled the wheels of life, and rewarded decency.

            This incidentally, shows us where the Welfare State goes very wrong, in keeping people alive and housed whatever bad character they may have, as we see in all cities today…..

            The earlier system favoured decent people who were good neighbours and workers.

            • Of course, this was not a ‘barter economy’, they were still selling what they produced into the market, but a marginal activity that helped survival in times of economic stress and money shortages.

              Nor was it a kind of Collectivism, which some idiots now think will be the solution, as it was based on individual and family effort as the basic units.

            • Xabier, the welfare state is a classic negative filter. Recipients with dignity and a desire to make progress try to find their way out of it and back into the productive economy; the devotees of “gimme” stay where they are and demand ever more benefits. Open your borders and you move to stage two: those who want to work do their best to stay home and work for their own country, or if that fails work abroad to send money home; those who want to sponge go where the sponge is richest, and again demand ever more benefits.

              The welfare state is as ruinous now as when the Roman Empire first created “bread and circuses”. (Panem et circenses)

            • Nicole Foss speaks to how important trust is in economic transactions. It is key. Today, one cannot trust that your currency will maintain value. Trust is every5ing, especially in a barter economy.
              Part of the secret of community and family survival was trusting and depending upon your neighbors.

        • That is the option….why do you all think the Central Banks have been repatriating their gold and the Eastern Central Banks have been buying like crazy?

          The System is collapsing and the only option is to reset it with gold….if they can even reset anything. More like let it collapse and we will use gold to trade if anyone is left to trade with.

          The Gold price will lock out all of the plebes. Who ends up with all the gold…..the same people running the show now…..suckers

            • And it’s not just central banks hoarding gold, rich people the world are suddenly these last couple of months noticing and they’re buyers. The premiums above the spot price for gold and silver have NEVER been this high. That shows that demand is strong and supply not so much.

            • True. I saw a chart this morning regarding where the most popular investments have been over time. Now it is gold and cash. At one time, it was investment in Emerging Markets.

          • I looked on Texas Precious Metals, the online dealer I usually buy from. Golden Buffalo coins are selling for $115 over spot price for a 1 ounce coin, a 6% markup from spot. Silver Eagles are 100% sold out but they were selling at $6 above spot, a 32% markup from the spot price. There prices are always competitive too but these premiums are about triple above historical averages, so there will be other dealers charging more. The fact that some miners haven’t been producing and some refiners haven’t been delivering is exacerbating this supply situation. Anyone with a brain and wealth is going to be looking for gold and silver at the very least to hedge what’s going on, if nothing else.

  3. No Mercedes Benz for you…so funny, we can practice “Socialism” all we like here in USA, but not YOU All South of the Border..

    Miami Herald
    Federal agents seize more than 80 luxury cars at Port Everglades bound for Venezuela
    Jay Weaver
    July 8, 2020, 7:00 AM
    Port Everglades is looking like an auto dealership these days, with rows of high-end vehicles on display, including a Mercedes Biturbo SUV worth a whopping $150,000, and even a few low-end cars, such as a Toyota Corolla valued at a meager $20,000.
    There are 81 cars lined up, with a collective retail price of $3.2 million. And the feds have confiscated them all, with plans to seize a lot more.
    Homeland Security Investigations says the new vehicles have been seized because a ring backed by a notorious Venezuelan billionaire and his associates tried to smuggle them out of South Florida to Venezuela, in violation of U.S. export laws and sanctions against the Latin American nation’s socialist government.

    Man. Can’t we give the ruling class Commies are break!?🤑

    • Oh no, another go at this old trope!
      It has all the usual hallmarks.
      We have govt, they have regime.
      ‘Western led global integration’; give me a break!
      ‘Insider intelligence’; yeah right
      ‘Vast sums’; hmmm, Russia’s economy is smaller than Texas I believe?

      etc etc.
      Attention is being diverted …. again … and the useful idiots will write new tales to scapegoat the ‘other’.

      This is a ‘Western Capitalist Model’ that is failing, one from which Russia has been increasingly excluded/did not integrate into.
      Grade; C minus, not worth the toilet paper it is written on

      • Strange that you could’t find anything interesting about Putins way to power and his powerbase?

        • Nothing new here. Putin bad. Orange man bad. China bad. We know, we know. Ok already.
          People should look closer to home for their scapegoats.
          A Clunton exposay perhaps, money in academia, corrupt private public partnerships, the GFC convictions…oh thats right, there were none.
          This Putin dude has been shut out of the halls of power.
          Those halls are in London, Washington, Brussels.
          This is a diversion is all.

  4. So this is what collapse looks like. We’re in it right now, not waiting for it to happen one day.

    As Gail said in a previous article, when things get tough, people go nuts (aka squabble over resources). It’s nobody’s fault in particular, it’s our socio-genetic programming and why every society/civilisation tracks more-or-less the same trajectory.

    As an example of crazy, Aust has recorded 2 COVID deaths in the last 4 weeks, but an increase in cases, so states have locked down their borders again. 2 deaths = an increase of 0.016% in the normal, ongoing death rate.

    If you want to understand some of the machinations behind the faked pandemic, here’s a useful article: Undercover Nurse Exposes COVID-19 NY Hospital Nightmare https://articles.mercola.com/sites/articles/archive/2020/06/27/elmhurst-hospital-coronavirus.aspx?cid_source=wnl&cid_medium=email&cid_content=art2HL&cid=20200709Z2&et_cid=DM586763&et_rid=911936350

    Even those details don’t matter though, as Gail says resource depletion and too many people are at the heart of everything, which is why a lot of people are going to die one way or another.

    • New York had a particularly bad experience before. It didn’t really understand how to treat the patients, so it did a whole lot of wrong things. It was a nightmare. You would hope it would do better now.

      People don’t understand they do by closing down borders. New York’s 14-day quarantine requirements for many out-ot-staters are definitely a problem now.

      • Medical Triage will become more and more normal. Those who are Elderly or Male(Since Men are more likely to die) will be back of the line.

        • That would probably suit most old women, as they are never that unhappy to lose their husbands as far as I have observed.

          All the old married men I know lead rather miserable lives, afraid of being divorced!

      • Gail, I rather think the New York politicians did understand what they were doing. That is why, before sending thousands to the death camps (masquerading as nursing homes) they first passed a law shielding everyone owning, managing, or running the death camps from all civil and criminal liability. Josef Mengele would have approved.

        • Robert, yes exactly. They killed off some costly useless eaters. Now, Cuomo wants the Dem nomination for president.

  5. https://www.usatoday.com/story/news/politics/2020/07/09/anthony-fauci-says-political-divide-has-weakened-coronavirus-response/5409322002/

    ‘Dr. Anthony Fauci says extreme partisanship has made it harder for US to respond to coronavirus’

    “I mean, you have to be having blindfolders on and covering your ears to think that we don’t live in a very divisive society now from a political standpoint. I mean, it’s just unfortunate, but it is what it is,” Fauci said in an interview with FiveThirtyEight’s “PODCAST-19” released Thursday.

    I thought when the virus was spreading in the US it was unlikely that something like a virus that responds to opportunity to infect new hosts, having nothing to do with political or religious persuasions, we could get on the same page, but that didn’t happen.

    • And Chinese collaborator and propagandist Fauci has done more than his fair share of spreading partisanship. Trump should have fired him months ago.

  6. Two deaths huh?

    https://www.aihw.gov.au/reports/diabetes/diabetes-snapshot/contents/deaths-from-diabetes

    Diabetes contributed in over 17,000 deaths in 2017 (11% of all deaths) according to AIHW analysis of the National Mortality Database. Diabetes was the underlying cause of death in around 4,800 deaths (28% of diabetes deaths). It was an associated cause of death in a further 12,200 deaths (72% of diabetes deaths).

    Yet our instuitional “carers” still push a food pyramid that emphasizes high carbs and “lean meat” and small proportions of “healthy” oils (which means seed oils produced by the big supermarket suppliers.)

    https://nutritionaustralia.org/fact-sheets/healthy-eating-pyramid/

    Here is what the “fact” sheet says about the fats and oils one should consume:

    The top layer refers to healthy fats because we need small amounts every day to support heart health and brain function. We should choose foods that contain healthy fats instead of foods that contain saturated fats and trans fats.

    Choose unrefined polyunsaturated and monounsaturated fats from plant sources, such as extra virgin olive oil, nut and seed oils. Limit the amount of saturated fat you consume and avoid trans fats.

    [No butter? No lard? No coconut oil? Because coconut oil is a saturated fat. What is wrong with that? Why fats and oils “from plant sources”? I can’t eat a roast? I can’t eat the marrow from a shin? I have to cut the fat off my steak? Why “seed oils”? Because this advice is propaganda for Bayer and Monsanto, Big Ag, Big Pharma, and Big Medicine/Illness Management that has made a bonanza out of the “high cholesterol” scam selling statin drugs that leave you sicker then when you started – Kim]

    We also get healthy fats from foods in the other food groups, such as avocados, nuts, seeds and fish, so we only need a little bit extra from oils and spreads each day.

    So the white labcoat authorties are telling us to get our calories from carbs, i.e., eat a high-carb diet while people are dropping like flies from diabetes-related ilnesses. But two people die from the flu and they close the economy?

    It is IMPOSSIBLE for a person to get his head fully around to what degree oligarchical interests, public “servants”, time serving feather-bedders, scheming sociopaths and cretins now have full control of the levers of our societies.

    It really is no longer possible to be too cynical about public life.

    • Well summarised.
      As per Twain … sort of…’ If you don’t listen to the experts you are uninformed. If you do you are misinformed’.
      There are plenty of people hereabouts on multiple pills per day. Nobody can possibly understand the effects of such combinations. Yet prescribe away the experts do. Useful idi…

    • Those who follow the latest nutritional advice and fads mostly run the risk of making themselves very ill indeed.

      Ditto with the ‘everyone over 55 needs to take this drug’ propaganda.

      One dreads the day when the ‘perfect’ nutritional and medication regime is imposed by law by these people and there is no escape.

      We can be quite sure it would only benefit some corporations.

    • I have come to the conclusion that one of the most important facets of a good diet is eating as few calories as you can get away with. Not anorexic-like, just good shape. Anyhow, I came across this TED talk on YT earlier this week, another video that appeared in my YT recommendation list out of the blue at a suspiciously convenient time (18 min).

      Reversing Type 2 diabetes starts with ignoring the guidelines | Sarah Hallberg

      It is a very convincing talk, and the two main themes for getting rid of type 2 diabetes via diet are:
      1/ Eat as few grains, potatoes and sugar as possible
      2/ Do eat fat. See video for details.

      I find it very odd that my teenage children refuse to eat the tasty fat on meat (especially roasts) because ‘it isn’t healthy’, but have no problems consuming the fat in biscuits, cakes and other snacks. Not that they eat a lot of snacks.

      • I eat a diet that includes quite a few nuts and some cheese, yogurt, and fish. But it doesn’t include much meat or fats in general.

        If a person walks a lot, every hour, a fairly high carbohydrate diet works, if these carbohydrates are in their original form–with skins on, for example. Cooked rice works, but not white bread.

        The diet that works may depend on the individual.

        • Gail, when I was 17 my paternal grandmother dies from diabetes. In those days, there was no effective treatment (insulin had not yet been synthesised) and she had been bedridden for several years. Given that there was a 50% probability I carried the gene, I gave up refined sugar. Well, not quite: it was two years plus before I had deconditioned my body from feeling the cravings. But from that day, no sweets and no desserts. (Except perhaps twice a year on very special occasions.)

          Later, no saturated fats: olive oil for western cooking, sesame oil for Asian cooking. Very little red meat; a little pork, chicken, and fish. And very few refined carbohydrates, so no white bread, only cereals with no added sugar, and, of course, only soft drinks free from both sugar and artificial sweeteners. That was 58 years ago, and I’m still here, and still diabetes free as of my last blood test.

          But recall, I was then still living in Africa, and one of the (many) things I learned from the locals is that you take responsibility for your own health, because nobody else will.

      • Submitted for your approval (does that ever date me) consider viewing this video for a comparison. It was the path I eventually chose, after exhausting every other possibility. It has made all the difference in my health. I will never go back to my old ways.

        Cheers, D3G

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