Today I am going to be writing to you about a passage from the book, Cold War 2.0: Dawn of the Asian Millennium. Authored by Andranik Aghazarian.
CHAPTER 3: THE ECONOMIC CRISIS, SECTION 1: INTRODUCTION
“Economic depression cannot be cured by legislative action, or executive pronouncement. Economic wounds must be healed by the action of cells of the economic body, the producers and consumers themselves.”
President Herbert C. Hoover.
The world is experiencing one of the most exceedingly awful pandemics: COVID-19. The best safeguard to stop spreading this potentially lethal virus is to remain at home and avoid social contact. Practically all the nations of the world are forced into total lock down for the well being of their society. Due to these extreme measures, economies are starting to feel the devastating effects of the crisis.
The corona virus has done what no wars or destruction has managed to accomplish, bringing the world economy to its knees. Supply lines are cut, travel restrictions and bans are in place, and consumer-based marketplaces are shut down. Surprisingly fast, the infectious calamity has pushed the world to the verge of an economic downturn, one that is more severe than the 2008 budgetary emergency. Record-high unemployment rates, government spending, delinquent payments, and foreclosures have become the “new normal.” The length of the downturn will rely upon numerous components, including the conduct of the infection itself, general reactions, and monetary intercessions.
Given the exceptional situation of the pandemic-prompted emergency, financial and money related policymakers are working without a playbook. Some are pushing ahead with massive bailouts that could all in all top $10 trillion USD, spending trillions like they are billions. In contrast, others struggle to reopen their respective economy as soon as possible. The immediate effects of COVID-19, will be felt well into late 2020 and 2021, and the longer-term economic implications are just getting started.
Long before COVID-19 became an epidemic, the worldwide economy, specifically those of developed nations, is already cruising into a storm of biblical proportions. “We anticipate the worst economic fallout since the Great Depression,” said Kristalina Georgieva, the overseeing chief of the International Monetary Fund. In the interim, the Organization for Economic Cooperation and Development said it had delivered the most grounded cautioning on record where most developed economies had entered a “sharp-log-jam.” The World Trade Organization, as far as it mattered, estimated that about all districts of the world would endure two-fold digit decreases in exchange this year, with North American and Asian exporters getting hit the hardest.
Most legislatures have successfully solidified social and monetary movements, in all or parts of their nations, to contain the flare-up, covering trivial organizations and requesting occupants to remain at home for weeks to months. Hence, billions of individuals have stayed under lock down. Significant business industries, particularly aircraft and other travel-related market segments, are nearing the precarious edge of insolvency. The expectation is that economies can shut down without causing violent disturbances, such as bankruptcies or unemployment, and can rapidly return to an acceptable level when the pandemic is over afterwards. However, what we are witnessing are the apocalyptic conditions in the economic sector.
The brand name big box stores Millennials have grown up with, are filing for bankruptcy in record amounts, part of the longer-term trend referred to as “retail-apocalypse.” Without these anchor stores to drive traffic to malls, small businesses will face harsh economic conditions and be forced to close en masse. This has led to the landlords being left holding the bags as their tenants break their leases in record amounts, often spurred on by government policies.
After weeks of lock downs, the areas which are struggling to reopen have been hit with riots and further delays, making matters even worse. Even as these areas attempt to reopen, the activity is not there in most sectors anymore and the restrictions put in place have hampered their income. The auto industry, which has yet to recover from the Great Recession of 2008, is being wiped out. The airline industry, which struggles at the best of times, is forced to see changes that make it economically un-viable without significant increases in the traveling costs. The housing industry has been inflated and is facing a record-breaking correction.
Unemployment, income inequality, and social unrest have never been higher in the U.S.. These effects are being felt around the world, and not just in the U.S.. All of this happened before the second wave of COVID-19. So, what will happen if this is just the beginning?
If you enjoyed this passage from the book, Cold War 2.0: Dawn of the Asian Millennium, then I encourage you to pick up a copy from the Amazon link in the description below. It is available in paperback and on Kindle. If you find this content interesting, please don't forget to like and subscribe. Sharing is caring, so share this with your friends and family. Stay tuned for more content like this in the near future.