Like many, I’ve been trying to figure out where we go from here. A few things are pretty clear…

1 – Covid-19 is in the process of shutting down most European countries, along with the USA, and many other countries aren’t too far behind.

2 – The lockdowns are ‘complete’, with little to no commercial activity, little to no travel, transport or trade.

3 – The lockdowns will need to be in place for a number of weeks (here in the UK, we’re told to expect the peak of the virus in 2 to 3 months time !)

4 – The 3 points above will represent a worst-case scenario for business/industry.

5 – Many millions of jobs depend on travel/tourism/hospitality, with the sector contributing nearly 800 billion Euros to GDP in Europe. These sectors will be decimated.

Putting these simple facts together suggests to me that this is many times worse than the GFC of 2008. I think it might be beyond the ability of the Central Banks and governments of the world to ‘fix’, so what are the options ? This is where it starts to get very disturbing. Unless I’m missing something, there are only 2…

1 – Individual countries central banks drop interest rates to zero (or less), possibly suspend things like mortgage payments and utility bills, and drop ‘free cash’ on every household.

2 – Hit the big red ‘reset’ button. This would involve a new global financial system. I don’t know how we’d get there, or how it could be implemented.

Number 1 probably wouldn’t work (or it wouldn’t work for long). Number 2, well, I have literally no idea. The idea that the financial damage will be limited enough that we can ‘get back to normal’ seems highly unlikely to me. What do you all think ?