Special to News Talk Florida
The metaphor ‘The Perfect Storm’ is an apt description of the circumstances and consequences of the Coronavirus/COVID-19 viral pandemic (global epidemic) affecting the whole world.
Why and how does a disease originating in a far-away land bring panic, and recession all over the world?
The Perfect Storm
This Perfect Storm of Coronavirus/COVID-19 viral pandemic affecting the world is the consequence of global problems festering for decades, while every individual, small business, corporation, and government concerned themselves with immediate short-term gains.
The pandemic was the spark which lit a fire in an economy drenched with the gasoline of printing money out of thin air (Quantitative Easing or QE) and low interest rates. The coronavirus viral pandemic was the straw that broke the camel’s back. It was the pin that pricked the stock market bubble of the last decade. As Peter Schiff, CEO of EuroPacific Capital says: “The bubble has been pricked. If it wasn’t the coronavirus, it would have been something else”. Our economic model was ready for its 7-10 yearly crisis, and waiting for the trigger. Recession in 2020 was expected.
The Center for Disease Control (CDC) – the highest authority in the world for dealing with epidemics and pandemics – predicts that 200,000 to 1.7 million people could die in USA alone if strict measures are not taken now. The US Federal Reserve printed $700 billion out of thin air and injected it into the economy (QE4, the fourth round of Quantitative Easing), while simultaneously lowering interest rates to near zero. The US Federal Reserve effectively unleashed every single measure at their disposal to stimulate the economy in one go before the crisis has even started. The usually upbeat and lively President Trump rightly sounds muted and looks worried. Anyone who is informed and has the foresight is deeply worried about the future.
Setting up for failure
The 2008-09 financial crisis never ended. The economy was simply propped up by printing money out of thin air (QE) and giving it to corporations and the government at low interest rates. The analogy used is that the hangover of the 2008-09 recession was ‘cured’ by drinking even more. Cheap money enabled un-viable loss-making businesses such as food delivery networks, rideshare apps, social media apps, Artificial-Intelligence startups in Silicon Valley, etc., to flourish and go to IPO without making any profit. However, the critical investments required in infrastructure, healthcare, transport, and manufacturing were not made. The availability of cheap money hid corporate and government inefficiency. Why bother with corporate and government efficiency when money is cheap. There was record corporate and government debt. The stock market boomed. Businesses and real estate flourished while the economy was hollowed out. Yet, the average person enjoyed none of the riches.
Social, political, and economic problems festered for decades. Inequality and racism increased, meritocracy declined, ideology rather than logic drove our politics, individuals are in debt even during good times, pursuit of sin and lack of morality and virtue defines the lives of millions, housing and healthcare are even more unaffordable, road network is crumbling and expensive, airports lag behind rest of the world, Just-in-Time (JIT) distribution with off-shoring manufacturing makes us dependent on Far East for essential goods, etc.
The nation’s leadership needs to lead at a time of pandemic. People need healthcare; communities need to be considerate and together; large amounts of food, medicines, masks, testing kits need to be manufactured and transported; businesses and shops need to shut down for weeks; people have to sustain themselves for weeks or months without an income.
Instead, we have squabbling leaders sending conflicting messages; chronic absence of meritocracy; demoralized and panicking public; people with little savings or safety net; every man for himself; healthcare which doesn’t cover treatment for the pandemic; reliance on the Far East for essential goods and medicines; Just-in-Time (JIT) distribution which takes weeks for products to be delivered; and hollowed out distribution and transport sector which is at the brink of bankruptcy when millions of tons of food, medicines, and medical supplies need to be transported.
We didn’t sweat in peace, so we will bleed in the war against the pandemic. We didn’t make hay while the sun was out. Now we suffer. The negative effects of the coronavirus such as recession and stagflation will be felt more acutely because of the underlying social, political and economic problems. Dr. Ashish Jha of the Harvard Global Health Institute says, “deeply disappointing” U.S. management of the outbreak is a “fiasco”, and is a “failure of the Federal leadership”.
Calm in the eye of the Storm
Just as there is calm and good weather at the center of the storm, there are those who will benefit financially from this Perfect Storm. Those who are informed and aware will grow even stronger during the storm and during the aftermath. Those who exist at the fringes of a globalized and connected world won’t be affected. Some will just be lucky. Most will suffer.
Those who saved in the last decade will find they can buy real estate and Gold at very low prices. Those who invested wisely in Gold in the last decade will see rising Gold prices. Those who invested in rental property in the last decade will find more demand for rental property created by the flux from lost jobs and bankrupt businesses.
The aftermath of the Perfect Storm
The Perfect Storm of the coronavirus pandemic will take away the lives of thousands of our loved ones.
The Perfect Storm will leave behind a wreckage of bankrupt businesses due to falling demand and shutdowns; lost jobs and destroyed careers; bankrupt and broken families. Essential goods will be scarce leading to high prices. People will not have disposable income and so there will be suppressed demand. This is classic stagflation: stagnation with inflation. Recession will inevitably follow.
The Government will almost certainly squeeze past laws to restrict individual freedom that will continue to stay beyond the pandemic. Erosion of our liberties will be another innocent bystander of the pandemic. As an example, the government is also passing/renewing Foreign Intelligence Surveillance Act (FISA) along with the Coronavirus Relief Bill. The amendments are for ‘targets of FISA surveillance warrants and limits on searches that can be conducted under the law related to US citizens and the internet”!
Those who are informed, aware, and invested wisely will grow even stronger during the storm and during the aftermath. Some will just be lucky. Most will suffer.
Every crisis is also an opportunity. This pandemic will be an opportunity to reassess the social-economic-political model we like to live in.
This is an opportunity to promote Healthcare for all as most health plans today don’t cover pandemics; Universal Basic Income for all as safety net for us during crises; transparency in how are taxes are spent; stronger communities; greater share of productivity for all; investment in infrastructure and manufacturing; breakup of the nexus of Deep-State which divides and distracts us; and more.
Why have we allowed global problems to fester for decades? Why have we allowed ourselves to be distracted, while our civil liberties, prosperity, and safety net been taken away over the last few decades? Why are we dis-associated from our country, its government, politics, religion, etc? The only time we show interest in these institutions is when we get something for free. Why do we keep promoting extravagant buffoons and ‘Killer Clowns’ into positions of leadership and power at every level in government and corporations? Why do we allow stock market bubbles for the 1% every decade while our economy is hollowed out?
Our major life-changing decisions are arbitrary. People find it easier to rationalize wrong and arbitrary decisions, instead of making rational decisions in the first place. We accept the status quo while knowing how deceitful it is, but question those who want to change it for us. We make excuses to not act, and lash out angrily at the one who motivates us to act.
“People will do anything, no matter how absurd, to avoid facing their own souls” – Carl Jung.
The Perfect Storm of the coronavirus pandemic is upon us. As we battle the storm and weather it out, let us resolve to build a stronger and better community, nation and world together. The global problems we allowed to fester for decades while we were distracted by the shiny toys, entertainment, and our collective myopic vision will have to be resolved or we will have a repeat of bigger and bigger crises every few years.
The Perfect Storm will be over one day, and then the sun will shine even brighter and create new opportunities. Our future and the future of generations ahead will depend on what we do in its aftermath.
Voice of Mankind is a non-profit Think Tank working to influence public opinion on issues which affect us all. We are here to make sense of this changing world. We provide original analysis, provoke thought, and enlighten on issues relevant to all of us. Our ideas are battle-tested in the real world everyday by us. You should too.