By Avneet Singh, Founder and Editor, Voice of Mankind
The Coronavirus/COVID-19 viral pandemic affecting the world is a Perfect Storm of a Global Pandemic, and the pin that will burst the biggest stock market bubble in history.
The pandemic, the bursting of the bubble, and the necessary and appropriate response from the Government will have serious long-term consequences.
There will be economic, social, cultural, and political consequences as a result of the Coronavirus/COVID-19 pandemic, and as a result of the response to it.
The $700 Billion (and counting) of Quantitative Easing (printing money out of thin air) was necessary as people and businesses will not be able to adapt to the changing landscape and months of unemployment. The ‘stay-at-home’ orders, quarantine, and restricting business and travel, were all necessary to minimize rapid spread of infection.
Economic impact: $700 Billion was printed from thin air as part of Quantitative Easing (QE4). Interest rates were lowered to near zero simultaneously. These together will cause a fall in Dollar simply because there is an extra $700 billion in circulation at near-zero interest rate. It is simple supply and demand. Imports will be more expensive. Falling dollars and the disruption of the supply chain will cause rising prices for imports. Rising prices, subsequent waves of the pandemic, and months of unemployment will reduce demand. Falling demand and rising costs of imports will force prices to rise even more to compensate for lower volume. Inflation and stagnated demand will cause stagflation.
Corporations that survive will do extremely well and become even larger, stronger and more influential. People and businesses who made good decisions in times of plenty will thrive, those who didn’t will be kept in a state of subsistence existence by the government with handouts. This will exacerbate inequality for both individuals and small businesses.
Social impact: Our liberty could be diminished unless we are vigilant. All governments and corporations have a tendency to use the noise and distraction of a crisis to squeeze through new laws and rules. These will hurt the public for years to come.
Laws could be squeezed in with a view to improving ‘public safety’ but they will persist beyond the pandemic and will be used to undermine human-rights activists, whistleblowers, and journalists who expose government and corporate corruption. It is no different from a conjurer emptying your pocket while you are distracted. An example of this is the government’s attempt to pass/renew Foreign Intelligence Surveillance Act (FISA) along with the Coronavirus Relief Bill. The FISA is for “targets of FISA surveillance warrants and limits on searches that can be conducted under the law related to US citizens and the internet”.
Cultural changes: People will be more polarized, hyper-individualistic, distrust each other more, while simultaneously denying it (more hypocrisy). New expressions such as “Who needs people”, “I don’t need anyone”, “I survived on my own” will be as embedded in our culture as selfies. Just as the smartphone didn’t make us more informed, this forced isolation in the face of a shared crisis will make people more isolated, polarized, and less trusting.
Political changes: The government will get bigger and have an even more prominent role in our lives. Contrast this with The American Way of doing things where we want small government, self-help, and free-market solutions. The disconnect between what people believe in, and the reality will get bigger.
There will be very few positive outcomes of this pandemic. There will be short-lived benefits such as less pollution and traffic, and news-worthy events.
The pandemic will also be remembered for squandered opportunities. Instead of evaluating and reflecting, we will continue with more of the same. The crises will not be seen as an opportunity to fix what is broken in our socio-economic-political model but to maintain the status quo at all costs ($700 billion and counting). More bailouts for all, bigger government, influential corporations, more inflation, more unemployment, more inequality, more social isolation. More of the bad, less of the good.
We can emerge stronger from this crisis if we all consciously take steps to prevent the bad, and promote the good. If we don’t do so, we will wake up to a different world once the storm is over.
“Until you make the unconscious conscious, it will direct your life and you will call it fate” – Carl Jung.
The crises, the response to it, and the consequences are too powerful a storm for anyone to resist. Almost everyone in the globalized connected world will be caught in it.
The Perfect Storm of this global pandemic at a time of biggest stock market bubble will not only take lives, it will also destroy the economy, and leave a wreckage of stagflation, unemployment, and recession which will take us months and years to clear. The impact of social breakdown and lost careers will persist for a generation or more.
I fear I will be right; I hope I am wrong.
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