Coronavirus verses Economy

The question has to be asked. Just where will the world economy end up as a result of government forced shut down of businesses??

Trump has some idea of the ramifications of destroying businesses and business confidence verses the cost to public health and human life.

Truth is the cure for the coronavirus could have far harsher ramifications as people lose jobs, people lose homes, people lose critical value in their superannuations and pensions are destroyed. When people are out of work they cannot afford food and basic medicine or health care. This has the potential to kill more than the virus itself.

If this continues much longer those people and companies who have businesses that supply jobs will falter, go bankrupt and may never return when this virus is under control. This will make economic recovery long and painful.

It’s a delicate balancing act. Lets hope government leaders make rational common sense decisions.

Cheers

Blackduck

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great topic. impossible to tell at this point

I think the whle thing is fascinating !
Twice as many men are killed as women - yet still the deranged misandrysts cannot accept Anything as even being an EQUAL opportunities oppressor ! :rofl:
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THen as you say @Blackduck - this is going to cost our economies dear

Seems to me too that whatever we spend (Borrow) in these early stages will have to be paid back - and QE is already stretched out as this as it will go - and Another 12 years of “Austerity” won’t go down well when we’ve already been locked indoors through our whole summer.

I’m expecting (Hoping) that this will be enough to put an end to the whole stupid “renewable energy” lies and get us stoking up some proper power stations and petrol cars !

I can’t see these posters going down well - next time they try to bring London to a stop !
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With any luck they’ll try it on again in Canning Town !

Oh and just for “Sh*ts an Giggles” - 25th aniversary of “Borderless EU” is celebrated with fully Closed Borders ! - as individual Countries realise what a total waste of space time and effort this Monstrous financial parasite is when called upon for decisive action of any sort ! :rofl::rofl: They’re all hiding under their beds in Brussels ! Oh and they’ve decided to “Work from home” and STILL claim the 323 euro “Daily Attendance allowance”

THE EU wouldn’t send Italy much needed help despite their pleas - Not Germany, France - nobody - Well actually RUssia sent 6 military aircraft packed with personnel and equipment !

One guy from Sweden - says he envies us - With the likes of Boris and Trump - All Sweden have for Govt is a coallition of Socialists and Greens ! :joy:

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Since March 16, investors and companies woke up with falls of around 10% on the New York Stock Exchange, thus being considered one of the most important in the world. In Spain, the Ibex 35 has experienced even greater losses and, together with Italy, it is one of the countries most damaged by the Covid-19.

In my opinion, this pandemic may trigger a new economic crisis similar to that of 2008, which had worldwide effects.

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What do you mean, MAY TRIGGER, it already has. Just in case you haven’t noticed the Dow is off 10,000 points since the start of this crisis.

Blackduck

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In the next post, I will reprint (with permission) an article in two parts, by James Rickards, on the topic of this thread.

In his article, Rickards links the coronavirus to a near-certain worldwide recession, and a highly-probable worldwide depression.

In addition, he makes the following chilling points:

  • global elites have been waiting for a crisis, such as this virus, in order to launch their “new” World Money — actually old, tried-and-true SDR’s, issued on a vast, industrial scale.

  • the principal purpose of this new money will be to replace the world’s reserve currency — taking reserve-currency control out of the hands of the United States, and placing it firmly in the hands of the global elites.

  • equally threatening, to both national sovereignty and personal freedom, will be the funding — with virtually unlimited amounts of money — of the global climate change agenda.
    As Jim Rickards states:
    “Over the next several years, we will see the issuance of SDRs to transnational organizations, such as the U.N. and World Bank, to be spent on climate change infrastructure and other elite pet projects outside the supervision of any democratically elected bodies. (I call this the New Blueprint for Worldwide Inflation.)” — I call it the New Blueprint for World Dictatorship.

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Addison Wiggin presents
The Daily Reckoning

Get Ready for World Money

By Jim Rickards

Portsmouth, New Hampshire
March 25, 2020

Dear Reader,

The coronavirus pandemic is a human tragedy. It’s also an economic tragedy, as the global economy is collapsing around us.

Second-quarter U.S. GDP may drop as much as 30%, which is a staggering figure. Many economists predict a third-quarter recovery, but there are still so many unknowns that it’s impossible to say.

It’s still too soon to say when America will reopen for business. And you can’t just flip a switch and return things to normal. That’s not how economies function.

Many industries may never recover and millions may be out of work for extended periods.

At the very least, we’re heading into a severe recession. And we could well be heading for a full-scale depression.

That’s not being alarmist.

The crisis will also accelerate the collapse of the dollar as the world’s leading reserve currency. So you need to prepare now. What do I mean?

The U.S. dollar is at the center of global trade.

The dollar represents about 60% of global reserve assets, 80% of global payments and almost 100% of global oil sales. About 40% of the world’s debt is issued in dollars.

The Bank for International Settlements (BIS) estimates that foreign banks hold over $13 trillion in dollar-denominated assets.

All this, despite the fact that the U.S. economy only accounts for about 15% of global GDP.

The reason the dollar is the world’s leading reserve currency is because there’s a very large liquid dollar-denominated bond market. Investors can go buy 30-day 10-year, 30-year Treasury notes, etc. The point is there’s a deep, liquid dollar-denominated bond market.

But the coronavirus crisis is creating a massive problem for foreign nations dependent on the dollar.

That’s because the world is facing a critical dollar shortage.

Many observers are surprised to hear about a dollar shortage. After all, didn’t the Fed print almost $4 trillion to bail out the system after 2008?

Yes, but while the Fed was printing $4 trillion, the world was creating $100 trillion in new debt.

This huge debt pyramid was fine as long as global growth was solid and dollars were flowing out of the U.S. and into emerging markets.

But that’s no longer the case, and that’s an understatement. Global growth was anemic before the crisis hit. Now it’s contracting rapidly.

If dollars are in short supply, China can’t control its currency and emerging markets can’t roll over their debts.

But again, you might say, isn’t the Fed engaged in its most massive liquidity injections ever and extending swap lines to foreign central banks to ensure they can access dollars?

Yes, but it’s not nearly enough to meet global funding needs.

Foreign nations are scrambling to acquire dollars right now. And that surging demand for dollars only drives up the value of the dollar, which puts additional strain on their ability to service debt.

When those debt holders want their money back, $4 trillion is not enough to finance $100 trillion, unless new debt replaces the old. That’s what causes a global liquidity crisis.

We’re facing a global liquidity crisis far worse than the one that occurred in 2008. In fact, the world is heading for a debt crisis not seen since the 1930s.

The trend away from the dollar was already underway before the latest crisis, led by China and Russia. Now that trend will greatly accelerate as the world seeks to eliminate, or greatly reduce, its dependence on the dollar.

That’s not just my opinion, by the way. Here’s what Eswar Prasad, former head of the IMF’s China team, says:

“The dollar’s surge will renew calls for a shift from a dollar-centric global financial system.”

It can happen much faster than you think. And the dollar’s days are more numbered now than ever.

But what will replace it? And why can you expect the dollar to lose up to 80% of its value in the years ahead? Read on.

Regards

Jim Rickards
for The Daily Reckoning



Get Ready for World Money — Part 2

By Jim Rickards

Dear Reader,

Since Federal Reserve resources were barely able to prevent complete collapse in 2008, it should be expected that an even larger collapse will overwhelm the Fed’s balance sheet.

That’s exactly the situation we’re facing right now.

The specter of a global debt crisis suggests the urgency for new liquidity sources, bigger than those that central banks can provide. The logic leads quickly to one currency for the planet.

The task of re-liquefying the world will fall to the IMF because the IMF will have the only clean balance sheet left among official institutions. The IMF will rise to the occasion with a towering issuance of special drawing rights (SDRs), and this monetary operation will effectively end the dollar’s role as the leading reserve currency.

The Federal Reserve has a printing press, they can print dollars. The IMF also has a printing press and can print SDRs. It’s just world money that could be handed out.

The IMF could function like a central bank through more frequent issuance of SDRs and by encouraging the use of “private SDRs” by banks and borrowers.

What exactly is an SDR?

The SDR is a form of world money printed by the IMF. It was created in 1969 as the realization of an earlier idea for world money called the “bancor,” proposed by John Maynard Keynes at the Bretton Woods conference in 1944.

The bancor was never adopted, but the SDR has been going strong for 50 years. I am often asked, “If I had 100 SDRs how many dollars would that be worth? How many euros would that be worth?”

There’s a formula for determining that, and as of today there are five currencies in the formula: dollars, sterling, yen, euros and yuan. Those are the five currencies that comprise the SDR calculation.

The important thing to realize is that the SDR is a source of potentially unlimited global liquidity. That’s why SDRs were invented in 1969 (when the world was seeking alternatives to the dollar), and that’s why they will be used in the imminent future.

At the previous rate of progress, it may have taken decades for the SDR to pose a serious challenge to the dollar. But as I’ve said for years, that process could be rapidly accelerated in a financial crisis where the world needed liquidity and the central banks were unable to provide it because they still have not normalized their balance sheets from the last crisis.

“In that case,” I’ve argued previously, “the replacement of the dollar could happen almost overnight.”

Well, guess what?

We’re facing a global financial crisis worse even than 2008. That’s because each crisis is larger than the previous one. The reason has to do with the system scale. In complex dynamic systems such as capital markets, risk is an exponential function of system scale. Increasing market scale correlates with exponentially larger market collapses.

This means a market panic far larger than the Panic of 2008.

SDRs have been used before. They were issued in several tranches during the monetary turmoil between 1971 and 1981 before they were put back on the shelf. In 2009 (also in a time of financial crisis), a new issue of SDRs was distributed to IMF members to provide liquidity after the panic of 2008.

The 2009 issuance was a case of the IMF “testing the plumbing” of the system to make sure it worked properly. With no issuance of SDRs for 28 years, from 1981–2009, the IMF wanted to rehearse the governance, computational and legal processes for issuing SDRs.

The purpose was partly to alleviate liquidity concerns at the time, but also partly to make sure the system works in case a large new issuance was needed on short notice. The 2009 experience showed the system worked fine.

Since 2009, the IMF has proceeded in slow steps to create a platform for massive new issuances of SDRs and the creation of a deep liquid pool of SDR-denominated assets.

On Jan. 7, 2011, the IMF issued a master plan for replacing the dollar with SDRs. This included the creation of an SDR bond market, SDR dealers, and ancillary facilities such as repos, derivatives, settlement and clearance channels, and the entire apparatus of a liquid bond market. A liquid bond market is critical.

The IMF study recommended that the SDR bond market replicate the infrastructure of the U.S. Treasury market, with hedging, financing, settlement and clearance mechanisms substantially similar to those used to support trading in Treasury securities today.

In November 2015, the Executive Committee of the IMF formally voted to admit the Chinese yuan into the basket of currencies into which an SDR is convertible.

In July 2016, the IMF issued a paper calling for the creation of a private SDR bond market. These bonds are called “M-SDRs” (for market SDRs) in contrast to “O-SDRs” (for official SDRs).

In August 2016, the World Bank announced that it would issue SDR-denominated bonds to private purchasers. Industrial and Commercial Bank of China (ICBC), the largest bank in China, will be the lead underwriter on the deal.

In September 2016, the IMF included the Chinese yuan in the SDR basket, giving China a seat at the monetary table.

Over the next several years, we will see the issuance of SDRs to transnational organizations, such as the U.N. and World Bank, to be spent on climate change infrastructure and other elite pet projects outside the supervision of any democratically elected bodies. (I call this the New Blueprint for Worldwide Inflation.)

The SDR can be issued in abundance to IMF members and can also be used in the future for a select list of the most important transactions in the world, including balance-of-payments settlements, oil pricing and the financial accounts of the world’s largest corporations, such as Exxon Mobil, Toyota and Royal Dutch Shell.

So the international monetary elite has been awaiting the global liquidity crisis that we’re facing right now. In the not-too-distant future, there will be massive issuances of SDRs to return liquidity to the world. The result will be the end of the dollar as the leading global reserve currency.

SDRs will perhaps never be issued in bank note form and may never be used on an everyday basis by citizens around the world. But even such limited usage does not alter the fact that the SDR is world money controlled by elites.

But monetary resets have happened three times before, in 1914, 1939 and 1971. On average, it happens about every 30 or 40 years. We’re going on 50.

So we’re long overdue.

You’ll still have dollars, but they’ll be local currency like the Mexican peso, for example. But its global dominance will end.

Based on past practice, we can expect that the dollar will be devalued by 50–80% in the coming years.

A devaluation of this magnitude will wipe out the value of your life’s savings. You’ll still have just as many dollars, but they won’t be worth nearly as much.

Individuals will not be allowed to own SDRs, but you can still protect your wealth by buying gold — if you can find any.

Regards,

Jim Rickards
for The Daily Reckoning


James G. Rickards is the editor of Strategic Intelligence. He is an American lawyer, economist,
and investment banker with 35 years of experience working in capital markets on Wall Street.
He is the author of The New York Times bestsellers Currency Wars and The Death of Money.


Thanks to Paradigm Press LLC, publisher of The Daily Reckoning, for permission to reprint it here.

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This is interesting but I have the uneasy feeling I’m going to wait in vain to read posts about some global news event which is NOT a plot by global elites to take over the world…

You are exactly right. The panic displayed by world governments with all these lock downs will do nothing but destroy their economies. Once the dust has settled and coronavirus is under control who will be left to restart the economy?? Who will have the money to start new businesses?? Who will start those millions of small business that employ soooo many people?? Sure people are cured but they will be poor or poorer. The level of poverty will be horrendous.

This is an ideal scenario for government controlled businesses. A way to control the masses. The very definition of communism.

Here in Australia we have 2500 cases of coronavirus and there have been 11 deaths. Yet thousands have been thrown out of work as shopping centres close and businesses shut down in sheer panic. Yet we lose 17,000 people a year from heart attack. That’s about 48 a day. So the response has been disproportionate to say the least.

Cheers

Blackduck

Causes of death Worldwide in 2020 so far

Heart Disease 2,000,000
Cancer 1.7 million
Children Under 5 = 1.6 million
Smoking 1,000,000
Alcohol 500,000
Car Accident 288,000
Suicides 229,000
Malaria 209,000
Seasonal Flu 103,000
Mothers during birth 66,000
CoronaVirus 8,900

Looking at WHO figures - these quoted figures seem to be in teh right “Ball-Park”

Don’t know whats gonna happen to the world, but china is still going to survive the crisis.HUH

@Clint, et All… This YouTube video may be of some interest…

Especially when you realise it was posted in Nov 2019…

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this is an interesting one as there have been many studies showing a direct correlation between rising unemployment and rising suicide rates , With unemployment on its way to 50% and no one knows if they will still have a job once the lock down ends we could see far more unemployed committing suicide then dying from Coronavirus

We’re ALL going to survive the Crisis as countries - Individually, some of us will die.

I found @Trendswithbenefits little video of that “mock up” really scary ! - All those chinless wonder beaurocrats being paid huge salaries to sit and talk about the “magical Private sector” as though it is somehow mystical (Which of course it is) and the guy who spoke of “The power of Entrepenneurship being vast” (Which f course it is - but only when it is NOT crippled by rafts of “regulation” and “Carbon Taxes” and layers of useless "World Order Government Like for example the EU and the UN ! all that talk and Mock ups and when the shyte hits the fan - All teh borders go back up and REAL Countries all try something different, learn from each other and Private Research Revs up ! WHere T.F. was the “Conclusion” of this "Excercise when we needed it ? and Where T.F. was this “Public Leadership” from these parasites ?

We’ll hear about it soon enough of course - How Feminism could have saved the world (whilst they’re all hiding under their beds) - How a “Strong World Government” is Needed to prevent it happening again !

In Fact Ex British PM (Labour) Gordon Brown was spouting exactly that a day or two back !

I am hopeful that we can get rid of these over-educated but under intelligent parasites, claim back our Education System and make 'em all get proper jobs !

But of course i wouldn’t want to say so because the police might came and arrest me for causing their “hurty feelings” !

This is what the UN has to say about it !
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What the hell are we doing giving Fools like that Hugely Paid positions ?

Do a search on Mahyar - He’s quite observant !


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