Winds Of Change
Just over a month ago I wrote this https://goldtadise.com/?p=457434
Case numbers were around 50,000 and today they stand at well over 600,000, with nearly 30,000 dead. The logarithmic curves for case numbers and deaths appeared to be flattening, but they are once again accellerating…
This horror is sweeping the planet. We have numerous ‘field hospitals’ being built in the UK – the series of ‘NHS Nightingale’ facilities with thousands of beds in each…
Over 40 doctors and nurses have died from the virus in Italy (fit and healthy people). For anyone in the US who is kidding themselves that this is comparable to the flu – when did you last see your health service collapse because of flu, taking the lives of hundreds (soon to be thousands) in a day ? When did you hear of dozens of healthy doctors dying from flu in a couple of weeks in a single country ? This plague is going to take down the US healthcare system, with patients dying on their own, with no treatment, no friends, no family and no funeral – just a rapid cremation. Your president took no notice of what was happening in the rest of the world, saying everything was great, it would soon go away, and you’d be back to normal by Easter. He closed his ears to medical advice. He knows best and everything is great. Utter bullshit and lies.
Here in the UK, like the rest of Europe, the Prime Minister followed the advice of the scientists very carefully. The only mistake I think they made was not going for the lockdown until Monday last week. the prior weekend was pleasant and sunny, with too much socialising going on. They probably should’ve locked down on Friday 20th. We’re going to have to live with the possible consequences of that.
We expect case numbers to peak in 2 or 3 weeks time, so it’ll be at least another 2 or 3 weeks after that before we can think about loosening some of the restrictions. Best case – total lockdown with near-zero business activity for 2 months. Worst case, numbers rise again, and we can’t come out of tough restrictions until there is an effective treatment or cure or enough ‘herd immunity’. That could be another few months quite easily. So maybe near-zero business/economic activity for 6 months or more.
Stop and think how this virus might play out in countries with very poor healthcare systems – Africa, South America, India, Pakistan.
Someone please explain to me how this doesn’t result in mass redundancy, business failures, banking crisis. monetary disaster. Someone please explain to me how the valuations of the companies that make up the stock market indices can miraculously recover. The world that emerges from all of this will not be the same world that we started 2020 with. Demand for holidays/vacations/hotels/bars/restaurants will be severely hit due to reduction in overall spending power and general reluctance to travel. Non-essential spending will collapse, and I’d expect a spike in demand for more basic goods.
Trust in this broken system will be eroded so much that gold and silver will be in very strong hands – those who know what is coming and won’t part with it for any price. As paper money is printed to oblivion, gold could easily see it’s ‘paper money’ value having zeros added to it.
The winds of change are here. These are historic times.
My take is this disease is very serious as it is as deadly as Ebola, but spreads as fasts as the flu. Business wise all indebted companies will suffer very badly with earnings down 30 to 50% but debt payments at same level. Other companies will suffer far less. I find it hard to imagine Mariott hotels will be plenty again in 3 to 6 months. Will take some time to have a normal economy again.
I said two months ago to the tent, get use to the word “unprecedented”. The one thing we could count on happening to our species was the one thing it seems nobody had a contingency plan for. My hope is for every plague/ecomomic downturn there is a renaissance as there always has been. We will be stronger, more efficient and probably get some great music out of this! My fear is we don’t put down the proper foundation at the same time the governments of the world enjoy big data too much. A recipe for disaster.