Over the past few days, there have been a number of economists and market prognosticators looking at the future of America and the world in a "post" CV-19 world. In the ultra short term, a deep recession is certain to hit. After all, economic activity has basically stopped entirely, aside from basic food goods everything else has been shut down. At the very least we are looking at a 20 to 30% GDP contraction. Some of the more interesting commentaries were made when comparing the current economic problems with the second world war: (1) a large percentage of the population became absent from daily economic life (joined the Army) (2) most economic activities stopped since much nonwar economic activity was transferred to war production, (3) a large percentage of economic life was dedicated to "unproductive:" activities (e.g. making bombs and guns and ammunition).
Right now, in many economies (like up here in Canada) a large percentage of the workforce has been sidelined. No one knows how many but its a lot. In fact, the US recorded its single largest increase in unemployment (if you think about it the WWII did something similar).
So where does that leave the economy? Well it's in hibernation and will be until (a) an effective treatment has been found for CV-19 and (b) a vaccine has been developed. We can guess that effective treatment will be found within the next few weeks and months -- already there are many potential candidates. Once the disease because "a problem" and not "a catastrophe" the world can start up again, and with the massive stimulus that governments have injected we should see a massive increase in GDP growth as pent up demand will be unleashed.
There are many questions here that remain difficult to answer, how quickly will things change, will population wearing masks help? Since one of the main problems is that asymptomatic CV-19 carriers seem to be the biggest problem -- according to some information nearly 20% of those who carry CV-19 never develop any symptoms, and yet the R0 remains high so that others will get sick and maybe die.
The funniest thing is that America's President who has been seriously "anti-science" is now forced to deal with "these people" all the time. There is still massive push back from the fringe right -- with something called Agenda-21; where the United Nation take over America and build a massive highway between Canada and Mexico (yeah me too never understood that one -- moreover the high starts in Manitoba...where the cattle populations outnumber the human population by a large margin).
The crazy and the religious are a problem, also the massive anti-vaxer movement that has polluted the American media for the past decade.
My CRYSTAL BALL tells me that once treatment has been identified economic activity will resume almost immediately, the world will certainly change, we are not certain how many have made predictions. As for me, I suspect a rebound equal to the size of the contraction, with inflation added. I suspect that nation-states will consider international trade useful but will be wary to put all their eggs in one basque, so I would suspect that there will be a substantial rise in inflation as pent up demand and a new economic reality takes hold.
I also suspect that everyone will forget about this episode!
Final note: the power of growth; So a week ago there had been 1,000 deaths in the US, yesterday the total was 9,000. At this rate, it will be 65,000 next week and if left unchecked the death rate in two weeks would be nearly half a million.
Right now, in many economies (like up here in Canada) a large percentage of the workforce has been sidelined. No one knows how many but its a lot. In fact, the US recorded its single largest increase in unemployment (if you think about it the WWII did something similar).
So where does that leave the economy? Well it's in hibernation and will be until (a) an effective treatment has been found for CV-19 and (b) a vaccine has been developed. We can guess that effective treatment will be found within the next few weeks and months -- already there are many potential candidates. Once the disease because "a problem" and not "a catastrophe" the world can start up again, and with the massive stimulus that governments have injected we should see a massive increase in GDP growth as pent up demand will be unleashed.
There are many questions here that remain difficult to answer, how quickly will things change, will population wearing masks help? Since one of the main problems is that asymptomatic CV-19 carriers seem to be the biggest problem -- according to some information nearly 20% of those who carry CV-19 never develop any symptoms, and yet the R0 remains high so that others will get sick and maybe die.
The funniest thing is that America's President who has been seriously "anti-science" is now forced to deal with "these people" all the time. There is still massive push back from the fringe right -- with something called Agenda-21; where the United Nation take over America and build a massive highway between Canada and Mexico (yeah me too never understood that one -- moreover the high starts in Manitoba...where the cattle populations outnumber the human population by a large margin).
The crazy and the religious are a problem, also the massive anti-vaxer movement that has polluted the American media for the past decade.
My CRYSTAL BALL tells me that once treatment has been identified economic activity will resume almost immediately, the world will certainly change, we are not certain how many have made predictions. As for me, I suspect a rebound equal to the size of the contraction, with inflation added. I suspect that nation-states will consider international trade useful but will be wary to put all their eggs in one basque, so I would suspect that there will be a substantial rise in inflation as pent up demand and a new economic reality takes hold.
I also suspect that everyone will forget about this episode!
Final note: the power of growth; So a week ago there had been 1,000 deaths in the US, yesterday the total was 9,000. At this rate, it will be 65,000 next week and if left unchecked the death rate in two weeks would be nearly half a million.
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