- Created: Wednesday, 01 April 2020 01:55
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It is April Fool's day 2020 and the world is in the grip of a crisis of a severity that we have not known during my lifetime. The last such crisis that can be compared with this is the Second World War that ended 75 years ago. But this crisis is different. Many more people died during the second world war than are likely to die as a result of this pandemic, but the fact is wars are actually good for the economy whereas this pandemic could well destroy the global economy and throw us all into an economic abyss far worse even than the great depression.
Where we stand at present essentially all the national economies are in lockdown. People are being told to stay at home and self-isolate and only go out to buy essentials - food, liquor, medicine, toilet paper etc. All non-essential public places are closed. Restaurants, cafes, bars, sporting venues, recreation venues, retail shops generally are closed. There is one glimmer of hope in all this. China where the pandemic started actually is telling the world that their lockdwon has been succesful and they are re-opening for business.
MY PREDICTIONS WHERE ALL THIS IS LEADING
I see some countries handling this pandemic better than others. I see Australia, the European countries, Canada, New Zealand and China Japan and Korea actually managing to stop the spread of the virus. I see countries like India, Africa, Indonesia, and South American countries being ravaged by the virus indefinitely. I see the United States being brought to its kness economically and politically as a result of the virus.
Life will never be the same again even in the countries that have managed to stop the spread of the virus. There will be a total halt on immigration and tourism. Their soverign debt will increase exponentially as they dole out more and more money as stimulus packages to try and get their economies moving again. They could even get to the stage of simply priniting money and the unemployed will line up in queues for cash handouts. I expect the banking system in these countries will be put under such strain from bad debts that the governments will have to in some way prop up the banks if not actually bail them out.
Economic life in the community will never be the same again. The whole retail sector will be destroyed and will never recover. The shopping malls will be ghost towns where the only shops open for trade will be the supermarkets, the liquor stores, take-away food outlets, convenience stores and post offices. There will be very few restaurants. The great bulk of the population will have become accustomed to this notion of staying home where it is safe, and not going out unless they absolutely have to. There will be no cinemas, theaters, live concerts etc. All entertainment will be had online. The professional sector, doctors dentists accountants etc is the only area of the economy that is likely to return to business as usual.
These are my predictions as at 1st April 2020. Subsequent posts will record whether or not I am right.