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.


*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.




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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?

  1. Mixed messages from the IMF, which is urging governments to stimulate economies like hell but to somehow do this sustainably and cautiously:

    “The International Monetary Fund urged governments to exercise fiscal caution as they borrow more to support economies hit by the Covid-19 pandemic, saying debt levels could soar to a record this year.

    “The need for continued fiscal support is clear, but this begs the question of how countries can finance it without debt becoming unsustainable,” Fiscal Affairs Department Director Vitor Gaspar and Gita Gopinath, the fund’s chief economist, said in a blog Friday.”

      • Note that it is ok to report a catastrophe for less developed countries, but not us. For sure, a catastrophe is heading everywhere. How can it be otherwise wise with affordable resources ‘running out’ and mega-jobless on the horizon?

    • There was also this recent link posted about the view of the IMF Director about the possibility of the upcoming Great Reset:

      So, what would it take for historians to look back at this crisis as the moment of a Great Reset?

      From the perspective of the IMF, we have seen a massive injection of fiscal stimulus to help countries deal with this crisis, and to shift gears for growth to return. It is of paramount importance that this growth should lead to a greener, smarter, fairer world in the future.

      The IMF seems to be very confused.

      • ‘Greener, smarter, fairer’ for some reason has me rolling on the floor in uncontrollable fits of laughter.

        I suspect I must have post-COVID symptoms of some kind.

      • The global economy is at the point of collapse and the IMF thinks that this is the precise moment to push for green taxes, a desubsidisation of fossil fuels, a greener economy and ‘fairer’ global growth. Whatever!

    • Absurd.

      Print,print! But do be conservative about it!

      Rather like the Spanish Inquisition telling executioners to observe proper fire safety standards?

      • 1. Make sure the stake is firmly seated in the ground.
        2.Make sure the ground has been cleared of twigs, brushwood, and other flammable material.
        3. Make sure the stake will burn more slowly than the heretic.
        4. Point the faggots inwards, towards the stake.
        5. Light the blue cord and retire to a safe distance.
        6. Encourage the spectators to sing “Someone’s burning, Lord, Kumbaya.”

        And remember you are working towards a cleaner, greener, fairer future.

      • Ha ha! I’m a combination of Tim and Jim and am very thankful I haven’t wasted my time being Rob, although I wish him well.

        • Yep!

          Tim: “But, as my reading of Gibbon reminds me, sometimes the reason everyone’s always saying things are going to hell in a hand basket is because in fact they are. The problem is that, unlike Rob, I am a lazy and disorganized person who does not base my life decisions on abstract ideas, and frankly I find it easier to resign myself to a premature and violent death than to figure out how to invest my money or repair tools or grow plants, at which I have always sucked.”

          • “I have described the triumph of barbarism and religion” Edward Gibbon, Ch 71.

  2. “As real yields turn negative, opportunity costs for holding non-yielding assets essentially vanish, particularly when viewed through the historical lens of fiat currencies and their purchasing power,” wrote Jeff deGraaf, chairman of Renaissance Macro Research, in a Thursday note.

    Typically they have this (and I think deliberately so) upside down. Gold is held as a risk free store of value whilst the interest you get from all other forms of savings (bonds, bank accounts, stocks) is the compensation you get for lending your savings to riskier entities.

    • So in the current zero interest rate environment (if not negative) there is no longer any incentive to put your savings into anything but gold.

    • One risk with gold is that there will be nothing to buy with it. Another risk is that you will use one gold coin, thieves will see you, and will take the remaining gold coins away by force.

      Boxes of dried food might be a better store of value. Small bottles of liquor might be a better tradable good. At least these are things you can perhaps use yourself.

      • Precious metals are the only thing of value in the new economic order to come failure to invest will lead to economic ruin and eventually a short life the mistake you have made Gail is not believing that people in power may have planned for the eventual reduction in fossil fuels and be instigating a cull in the worlds population as that may be the only way BAU would survive owning precious metals could be you and your families only mode of survival in the years to come because the plan could be to reduce the worlds population to 500 million .

      • A local stash of gold could be used to fund a new local development bank, if one supposes that all,other banks have gone bankrupt, as they soon will. Imagine a community striving to restart on a more local basis. Community B in the next county has a local pig industry. Both communities want to trade. Community A might wish to loan an entreprenuer money (perhaps silver or perhap a local community currency backed by gold) to start a potash industry, or whatever. This stash could jumpstart local trading and investment.

        • So would you give up your local stash of gold to start a community Bank?

          • and what if the thieves in Community C know where your bank is?

            • What if everything….It’s a wonder local banks ever got established.
              All investments and transactions are based on trust. Perhaps after all the fallout and population reduction have settled, local transactions will start over again, based on labor and trust. Perhaps John Doe leaves his stash for a grandchild…use your imagination. That, and Gail’s guidance are all that we have.

      • Gail, an alternate view.

        The most valuable thing either now or going forward is a group of people. The movie the”Ten Commandments” is a nice visual and aural example.

        The rules, the Ten Commandments, are handed down by God and thus not subject to debate by a group of nitpicking philosophers an example of which is Nietzsche who died agonizing over a horse on a street. The source is of these rules is not really that important, they must work well enough for people to live together as a group.

        That group must love and support its children, the movie “The Pawnbroker” has a broken man, played by Rod Steiger agonizing over the loss of his children, his family. He does not agonize over a lost house, a lost purse of coins, he loses his faith over the loss of his family. I am beginning to believe it also means a time for the individual to leave which leaves good memories for the next generation not a grinding burden.

        The group must internally support itself, there need to be rituals which recall the lessons of history so as not to forget them, those rituals need to self reference and support a God who in the past has supported the group and which by following those lessons of history endures through all circumstances. They need to be repeated on a schedule – it is called worship. God makes it simple, even when things don’t work out fairly it is “right” or it is the way of life and there will be a tomorrow. Argue about the existence of God all you like, in the end it works, in the end one gets Bach and not hip hop as part of the rituals.

        Modernism does not seem to work, whereas simple rules, one hour a week for reinforcement, a few silver coins in the plate and on to living life as a group that does not tear itself apart has a chance. You so well pointed out, silver coins are useless to the individual, in the group they are a convenient, fair way of exchanging services. Hoarding them seems to be in effect a way to get a jump on the next guy, that makes cooperation a bit of a challenge.

        Dennis L.

        • “Argue about the existence of God all you like, in the end it works, in the end one gets Bach and not hip hop as part of the rituals. ” Hip hop was in the 1990s.
          It’s not really a thing anymore. Most people rapping today will tell you it is simply a way of making money and is a stepping stone for their next venture.

          At its height, there were often repeated references to God and a certain view of history that places a certain race was either the original Isrealites, Egyptians or Muslims who are constantly being oppressed by another group.

          One can argue whether this helps the group at all but there was plenty of instances where those who participated in it recalledl the lessons of history so as not to forget them, and those rituals often self referenced and support the belief of a God.

          From what I see it is primarily white people who are being encouraged to abandon Bach and the lessons of the past and God.

        • “…nitpicking philosophers an example of which is Nietzsche who died agonizing over a horse on a street.”

          Uh, that’s not actually what killed him. But I’d rather go out like the ancient Greek philosopher who died laughing at his own joke. (I can post the joke, if you dare to read it.)

          • The joke would be appreciated.

            You are correct about the horse, he merely collapsed, skimmed the Wikipedia version of him, long, boring, dull, isolated, no friends, addicted to opium, self Rx chloral hydrate. He alienated his friends – this guy was a loser.

            Dennis L.

            • The guy couldn’t abide cruelty to animals. He was a civilized gentleman living among savages. Nineteenth century Europe could be a very tough place for sensitive intellectuals. Like many of them, Nietzsche burned so very brightly, and then he burned out. It was and still is extremely common among “high achievers”. There were no rehab clinics back then to wean him off of his drug addictions. But in the absence of more detailed knowledge of his case,I would put his demise down to middle-age burnout.

            • Nietzsche suffered a psychiatric breakdown on top of various health problems (possibly including syphilis),and spent his last decade having to be cared for by others. It is hard to say exactly why, but surely he could not have been “driven mad” by his philosophical ideas, or by seeing a horse whipped.

              The other philosopher I mentioned was Chrysippus of Soli, a Stoic. Thus spake Wikipedia: ‘In the second account [by Diogenes Laërtius], he was watching a donkey eat some figs and cried out: “Now give the donkey a drink of pure wine to wash down the figs”, whereupon he died in a fit of laughter.’ Behold the man:

            • At one time chloral was thought to be something of a wonder cure, which led to an awful lot of misery and wasted lives, especially among the talented and intellectual. The poor just drank heavily.

        • This is a challenge. The recent planned chaos and programme against “othering” (which “others” more than the previous programme) has atomized Westerners, at least. We don’t really know where we came from, who we are, and what collective values we might hold (or be allowed to hold). We are encouraged not only not to know and not to care, but are instructed that to know/care is bordering on evil. Just as an example, American freedoms, such as freedom of speech, are now seen as anathema in a wide range of quarters. The U.S. having been described by some not as a nation, but something propositional, come to find many residents don’t seem to actually like most of the propositions!

        • If memory serves, the first of those Ten Commandments is “Thou shalt have no other gods before me”. I agree with Gore Vidal, that monotheism is the worst and most evil creed ever to have infected the human mind. How many millions, I wonder, have died because of that one sentence? And how many have killed the innocent “in the name of God”? How many societies, how many civilisations, have been destroyed? And yet the deluded still spread this same poison.

      • Gail, I think you are missing the point that in the end cryptos will be backed by gold which makes it so important.

        • gold’s initial value has been in the fact that it doesn’t deteriorate over time

          and it requires a lot of energy input to get hold of

          gold ‘exists’

          cryptocash does not ‘exist’, other than in electronic software form.

          Rather like pointing to a cloud on a mountain top and saying it exists in real terms, because the mountain is holding it up

          climb the mountain, and there’s nothing to get hold of

          • gold’s initial value has been in the fact that it doesn’t deteriorate over time.

            Sounds a bit like plastic. The darn stuff just won’t biodegrade!

          • cryptocash does not ‘exist’, other than in electronic software form

            Just for fun, let’s look at the etymology.
            The English word “cash” originally meant a “money box”, and later acquired the a secondary meaning of “money”. This secondary usage became the sole meaning in the 18th century. The word “cash” derives from the Middle French caisse (“money box”), which in turn derives from the Old Italian cassa, and ultimately from the Latin capsa (“box”).

            Whether, physical, virtual or whatever, “cash” is readily exchangeable and has a precise unit value that is generally agreed among its users. In other words, it is fungible (being something [such as money or a commodity] of such a nature that one part or quantity may be replaced by another equal part or quantity in paying a debt or settling an account).

            One dollar bill has the same cash value as every other dollar bill. One dollar of cryptocash also has the same value for those who deal in cryptocash. This is one of the prerequisites for a medium of exchange. Being hard to forge and convenient for users are other prerequisites. Although it may seem counterintuitive to traditionallists, in our current era, being physically “real” is not essential for cash and may even be a handicap.

            • “Being hard to forge and convenient for users are other prerequisites. Although it may seem counterintuitive to traditionallists, in our current era, being physically “real” is not essential for cash and may even be a handicap.”

              That’s my thought, too! This is the duality between physical goods and immaterial ones. You always need a gate between them. Any currency has no value if not backed on something like gold.

            • Entwining historical meanings into current words is pointless, other than as a mental exercise

              The English language is our current ‘lingua franca’, through common usage, no more. At Detroit airport, the border lady spoke in ‘English’ and I didn’t understand a single word of what she said. Not one. I just nodded and smiled—that seemed to be enough.

              Meanings of words can change in a generation. If someone spoke to you in Chaucerian English, you wouldn’t understand it.

              My grandfather used words which were pure Germanic. He didn’t know that they were 1000 years old. He never left England. But to him they made perfect English sense.

              My other grandfather always referred to a quarter of an English pound as a ‘dollar’. At that time dollars were 4 to the pound. He had never left England either.

              words come into common usage.


              If Cryptocash made sense in the long and established term, then governments would use it as a medium of exchange, and workers would be happy to receive crypto wages. Would you? Why not?

              When Zimbabwe reached XXXX % inflation, why didnt they just create create cryptocash and sort their problems that way?


              Their currency wasn’t underpinned by sufficient physical energy as defined by GDP. So no one believed their currency had any value. But the moneyprinters kept their presses rolling in the hope that ‘something would turn up’

              On the other hand, anyone lucky enough to have gold or American dollars in Zimbabwe could still eat –ie exchange them for real forms of energy. Had they been issued with Cryptocash, that exchange would not have been possible.

              The energy factor that underpins the American dollar will also peter out, and then that currency will inflate itself out of existence. Hard to say when, because the global economic system has pegged itself to the dollar on the fantasy that US energy supplies are ‘infinite’.

              They are not.

              Zimbabwean energy resources (their productive land) didn’t diasppear, it became unusable through idiot politicians.
              My guess is that American energy resources will go the same way

              with the same end results

            • The alchemists tried for centuries to create gold, and failed. They also tried to destroy gold (it dissolves in aqua regia) but that didn’t work too well either. That is why gold was seen as a store of value. But cryptocash is created by algorithms, and therefore can be destroyed by algorithms. It is not a store of value, but an elaborate “bait and switch”.

  3. Everyone is expecting the markets to crash why? I think we’re witnessing how the market will react it’s going to melt up. Tesla is now valued more than Toyota and why shouldn’t it be. Tesla doesn’t actually make cars so it has very little exposure to the Car market sales decline. Toyota on the other hand actually makes cars. They’re in trouble. That’s the pattern to look for.

    • A lady at work drives a Tesla. I occasionally see a Tesla out on the street. Who makes those cars if “Tesla doesn’t actually make cars”?

      • I think what he means is that Tesla doesn’t need to make a profit like Toyota and it probably never will. It exists by selling stock ,adding low interest debt and getting government subsidies.

        • I have always read and respected Mr. Roberts comments on OFW. I certainly was not challenging his statement.
          When I saw that “Tesla doesn’t actually make cars….”, I thought there might be some kind of other entity that was actually doing the production.
          Perhaps something like my 2005 Pontiac Vibe. It is the same car as a Toyota Matrix. Both are built on the Toyota Corolla drive train. Both the Vibe and the Matrix were built by New United Motor Manufacturing, Inc. (NUUMI). NUUMI was a joint venture of General Motors and Toyota.
          Pontiac did not produce the Vibe and Toyota did not produce the Matrix. The Matrix was produced at a NUUMI factory in Canada and the Vibe was produced at a former GM plant in Fremont CA that was taken over by NUUMI.
          I thought Mr. Roberts might know about some paper shuffling and name switching in the Tesla production. The former NUUMI plant in Fremont was sold to Tesla and became The Tesla Factory.

        • If only Mr. Ponzi had had access to government subsidies, his scheme could have been as successful as Mr. Musk’s.

    • “Toyota on the other hand actually makes cars. They’re in trouble. That’s the pattern to look for.” Toyota actually makes a tangible good.

      Any producer who has been involved in producing a good since about the early 2000s, has been trying to get away from it because manufacturing is being relegated to a low-profit venture. What is profitable is providing lackluster services and charging a premium for them while practically giving away tangible goods.

      I wonder if they are trying to hide the inflation are just spreading the true cost over installed payments to make their revenue streams look better.

    • also if you don’t test people there will be less cases yup makes sense ok you have my permission take out as many loans as you can and buy buy buy tesla what could possibly go wrong ah ha ha ha thanks for the laugh chuckle head

  4. What did Gail do to Fast Eddy?

    Did she sweep him under the rug along with the old OFW blog layout?

      • on the bright side, the OFW comments will probably double once FE returns. more discussion is a good thing, right?

        • There are some fast eddies in Japan that you can actually take a boat trip to view.

          They go round and round and round and on and on and on.

          It’s also said that the blowfish that swim in these waters are extra-delicious as they develop more muscles by constantly battling the currents.

        • FE does tend to get the bit between his teeth and go off on one.

          I thought it was rather sweet, if a little inconsistent, that a self-confessed misanthrope felt so strongly about racism. He could be unnecessarily rude and he veered towards paranoia but at least that was moderated by a sense of humour.

          As you can probably tell, I have mixed feelings re FE. 😀

        • yup

          FE attended the public speaking seminar at Trump University

    • As I recall he was irritated by the fact that not everybody on this site agreed with his views on systemic racism.

        • No. If I remember correctly, he he IS strongly anti-racist and has a lot of sympathy for the plight of black people in the US.

          • Okay, I’ll take your word for it. I was thinking of his remarks about the Elders of Z–n.

  5. From “Wolf Street”

    ” 128 Days With My Mother-in-Law.
    In a way, my wife and I are lucky (at least that’s what we tell ourselves most of the time), since my Mexican mother-in-law is also living with us, having arrived in Barcelona, with her usual impeccable timing, just ten days before Spain’s lockdown began. She was supposed to stay with us in our 85 square-meter apartment (915 square feet) for just a month before moving on to a place of her own, but during the lockdown that was impossible. We’ve been sharing the same space now for 128 days — a personal record that keeps growing by the day!

    Aside from the occasional family drama and despite the dystopian backdrop, we’re actually coexisting in relative peace and harmony. And by pooling our resources, we’ve been able to weather the storm financially better than we would have.”

    My parents made it that way, my grandmother lived with us in exchange for the family home which she got when her husband passed from an industrial accident. Again, it is always a group. The above quote is current. We have many apartments for many people living solo, it appears to me that this is not going to work going forward, economically, real estate without a group will have declining value.

    Dennis L.

    • An aunt of my husband moved in with our family for two years before she died. She was in failing health. She frequently needed someone to go with her to the emergency room and to visit her in the hospital. She was adamant that she did not want to go to a nursing home. I could not work as many hours as I had previously, with my need to look after her.

      I was surprised that when she died, she left her estate to me. It was bigger than I expected, but not huge.

    • “… real estate without a group will have declining value.”


      the average house may need many inhabitants to be economical, if most are unemployed.

      fairly soon (a year or two or more?), most houses may be inhabited either by many persons or by nobody.

      the housing market will be flooded with too many for sale, and the market will crash.

      at some point in the future, houses may not have much of any value as an asset.

      prices may become so low that a house might be “owned” not for any asset value, but just so the owner has the right to live there.

      • Years ago I posted a title of a book here, the title of which forgotten, of an accountant that kept a diary journal entry concerning economy observations during the 1930s depression era. One thing I recall was real estate by and large was NOT a good investment during that period for reasons, such as, taxes, upkeep/maintenance, lack of tenants who could pay rents, and unstable values. If I remember right, US government bonds were!
        In today’s day and age, that may not hold…

  6. I suddenly bought two 15 amp 18″ corded electric chain saws with bars and chain replacements instead of a gasoline-powered one. despite wood being a low-efficiency energy source compared to oil. This signifies a sudden and radical change in my thinking. No question that gas affords more energy density and portability although with some complexities of tearing a shoulder rotator cuff trying to pull the cord a zillion times to start it, the need for gas oil mix, spark plugs etc. Electric is also much quieter and doesn’t alert people for miles. But it reflects my realization that in five years when I may finally have to take them out of the box, gas may be more difficult to obtain, whereas, stocking up on solar panels and a series of Battelborn 100Ah batteries, etc may ultimately be the better long term strategy. Buy this stuff while the currency still buys something or these things are still on the shelf. Same principle for pressure-cooked food or better yet freeze-dried food. All energy and material inputs have already been accounted for and no need to cook when the time comes, in contrast to paper assets which depend on future energy inputs to hold value. Admitting to my self-centeredness, the best strategy may be to just blend in with the masses, keep things stored off-site, and just outlast most people. Or as they say, against a bear attack, just be sure you are not the slowest person.

    • Interesting thoughts, Hobbs.

      I often hear chainsaws roaring in the distance, and I like to play the game of figuring out who the user might be based on the perceived distance and direction of the sound. My hearing is not all that it was, but I can sometimes hear a loud chainsaw a couple of miles away.

      I bought a new 2-stroke engined chainsaw last year when the guy at the repair shop assured me this would be cheaper in the long run than trying to keep repairing the 20-year-old one, and I’m very happy with the performance. But the noise I could do with out. I refuse to operate one without the sort of ear protection people wear at firing ranges, but none of my neighbors care a hoot about that sort of thing. It’s part of the “macho” culture around here that real men don’t wear earmuffs ,and chainsaw trousers are for wimps.

      But after reading your post, I am now thinking I should get an electric chainsaw as a companion to the gas one. I like the idea of something that runs a bit quieter and with less vibration.

      • ‘Chainsaw trousers are for wimps’: hmm, should be a process of natural selection at work there……

    • Wood is less efficient, but a stockpile increases in utility as it seasons,and cannot really be stolen – unless, like the Vikings, they cut your throat and take the whole property, or you get taxed out of it, which is ‘theft by government’.

      All my assets have gone down or even fallen to zero, leaving me with only the pleasure of the art and books, the use of the house: but wood certainly isn’t going to get any cheaper or decline in utility.

      It’s also satisfying to look at one’s woodpile and see the tangible results of real effort.

  7. ‘I beg them’: Still-unemployed workers plead for Congress to extend federal $600 benefit
    By Tami Luhby, CNN
    Updated 9:30 AM EDT, Sat July 11, 2020
    “No one is hiring. They are laying people off,” said Munzer, 53. “I didn’t choose this. I beg them to extend it.”
    Not enough jobs for all the unemployed
    Many millions of Americans are in the same situation. Although employers have begun bringing back some workers after shedding millions of positions amid the coronavirus-fueled lockdowns in the spring, nearly 18 million people remain jobless and without many prospects. At the end of May, there were nearly four unemployed workers for every job opening, according to the most recent data from the Bureau of Labor Statistics.
    Plus, the new surge in cases has led at least two dozen states to pause or roll back their reopening plans, prompting additional job losses. And several companies have recently filed for bankruptcy, announced store closings or warned of thousands of layoffs to come.
    The enhanced benefit provides more than 25 million Americans with more than $15 billion each week, said Andrew Stettner, senior fellow at The Century Foundation. State payments alone replace only about 40% of wages, on average.
    Congress enacted the provision in late March as part of a historic expansion of the nation’s unemployment program at a time when health officials didn’t want people out looking for work. Now, lawmakers have only a few weeks left to decide whether to renew the $600 weekly boost in benefits.
    But they are split along party lines. Democrats generally favor extending the program, while Republicans fear that the generous enhancement creates a disincentive for people to return to work. Roughly two-thirds of recipients are now making more on unemployment than they did in wages, according to University of Chicago researchers.
    Whole industries remain paralyzed
    For Russell Zwolinski, however, the opposite is true. A concierge at a Chicago hotel who was laid off in mid-March, Zwolinski makes a lot of money over the summer from selling tours. While the hotel has reopened and called back some front desk staff and housekeepers, he said he’s not expecting to be rehired until tourists return, which could take months.

    This is going to be very unpleasant….ugly, in fact…as Gail once penned…just realize it’s not your fault

  8. The future is most unlikely to feature ‘flipping’, no doubt. Thank God!

    Maynard Keynes was brought up in a house which his parents bought upon marriage, and which still had the Victorian wallpaper they decorated it with when they died half a century later. Good thick stuff, made to last, like the house and the marriage.

    • Oh, this is hilarious! They keep cutting to a Tibetan monastery, but the guy is talking about Zen. How come nobody talks about weaponizing the ancient Christian practice of omphaloskepsis? That would be about as effective.

      • Yes, turns out it’s an actual word: contemplation of one’s navel as an aid to meditation. Where can I sign up for a course? Must the navel be squeaky clean before I start? And does it require a special omphaloskepsis mat?

        • Seriously? It’s usually done by Orthodox monks. The custom is to sit on a stool.

        • The only navel I have ever contemplated is the real Omphalos, the one outside the shrine of Apollo at Delphi. I confess that it taught me nothing. The Lion Gate of Mycenae, on the other hand, …

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