Turn the key and the economy will restart.
That’s a myth a lot of people in the mainstream have peddled since governments started shutting down the economy in response to the coronavirus pandemic.
That’s not going to happen. We’re not going back to normal.
In fact, things weren’t “normal” before the pandemic.
As Peter Schiff has been saying, too many mainstream pundits and prognosticators have focused exclusively on the pin and ignored the economic bubble that it popped. They argue that since the economic damage due to the COVID-19 shutdowns was self-inflicted, it’s not a real recession. It’s not a real economic collapse. It’s not that businesses are closing because the economy is bad. We just decided to shut them down. Therefore, we can just decide to open everything back up and everything will be fine. But as Schiff said, it’s not that simple.
What matters is that we got a wound. Look, if I grab a knife and I stab myself in the chest, I’m not OK because the wound is self-inflicted…
It doesn’t matter how I got stabbed. What matters is I have a knife in my chest and I’m bleeding. So, I can’t just ignore the wound because I was dumb enough to stab myself.”
I’ve been saying the same thing for weeks. The economy doesn’t stop and start on a dime. Just because Donald Trump snaps his fingers and says, “Go!” doesn’t mean that the crisis ends. The economic damage done to the economy by that knife is deep. In fact, the economy was already suffering from multiple knife wounds long before COVID-19 reared its ugly head.
It appears some people in the mainstream are starting to wake up to reality – sort of. Reuters recently ran an article headlined “With confidence shattered, the road to a ‘normal’ US economy looks long.”
The writer points out that the 9/11 attacks shut down airlines for three days. It took three years for the industry to recover. After the housing crash, it took five years before the balance between builders and buyers was healthy enough to revive the construction industry.
And the economic damage already inflicted by the government shutdown is staggering.
In just three weeks, 10% of the US labor force filed for unemployment. Another 5.2 million Americans filed jobless claims this week, bringing the four-week total to nearly 22 million people.
Meanwhile, US manufacturing output hit its lowest level since 1946. Factory production dropped at a 7.1% annualized rate in Q1 2020. That’s the sharpest decline since the first quarter of 2009. A separate survey showed New York state manufacturing activity plunged to its lowest level in the history of the survey.
And retail sales plummeted 8.7% in March. That means we’re about to see the biggest plunge in consumer spending in decades.
Those self-inflicted wounds can kill.
The Reuters’ columnist said we can’t expect consumers to just snap back to normal when the government begins lifting the coronavirus meltdown. As he put it, when public behavior suffers a shock, it’s slow to recover.
There is no doubt that this downturn will be historic in depth. But the nature of the event behind it is the core hurdle to an economic restart: A health crisis that has killed more than 28,000 people in the country, according to a Reuters tally, and has left fear and confusion in its wake. Behavioral economists note that even much smaller shocks to how people perceive the world can cause lasting effects in how they behave.”
Schiff pointed out that this will be a wakeup call for a lot of people that will also shift behavior. They will realize they need to have savings. They almost certainly won’t just jump in and start spending again.
Solid analysis. But it still misses the point.
It assumes everything was “normal” to begin with. It wasn’t normal. The economy was a big, fat, ugly debt bubble. Normal was abnormal. The economy was levered up to the hilt. Consumers were driving the economy with borrowed money. Corporations were already carrying record debt-loads. The government was already spending money as if we were in the depts of an economic recession.
Coronavirus popped the bubble. It pulled the last piece out of the Jenga game. It turned a fan on the house of cards. We’re not going back to normal any time soon.
This is not to say the coronavirus isn’t a problem. Even a healthy economy would suffer significant impacts under this kind of shutdown. But the government and central bank response, with trillions of dollars in stimulus, bailouts and money-printing, is making things worse. This is the arsonist throwing gasoline on the fire it started.
Consider this from Seeking Alpha:
The American government has committed more than $6T to arrest the economic downturn from the COVID-19 pandemic, with $2.35T in fiscal spending and $4T from the Federal Reserve. The figure represents more than a quarter of US economic output, and will mean for the first time since WWII, the nation will owe more than its economy can produce in a given year.”
The people who are just focusing on coronavirus are missing the bigger picture. You can’t understand what’s happening now if you don’t understand what was happening two months ago. Schiff summed it up.
We have a debt bubble. Now, everybody is defaulting on their loans. It doesn’t matter why they’re defaulting. All that matters is that they defaulted. And the cat’s out of the bag now. It’s gone. It’s over. The bubble has popped and now we are dealing with the consequences, not just of the virus, but of the consequences of the bubble.
In fact, we’re dealing with the consequences of the bubble that popped in 2008. We’re dealing with the consequences of the bubble that popped in 2001. Because we never finished dealing with them. Because the Fed kicked the can down the road and we’ve caught up with that can.
And now we have to deal with all of the bad consequences of repeated bubbles that are now blowing up.
And now the Fed, of course, is trying to reflate this, but it is never going to work.”
This Pestilent Is Revealing to All What Many of Us Have Known for a Long Time: This Godless Nation Was Designed by the Un-Godly to Fail and so Its Failure Was Not Just Predictable but Inevitable
This is exactly what Hitler did to Germany. He slowly took over their Constitution and enacted Marshall Law to “protect” the people.
Walter Veith & Martin Smith – Coronavirus, Noahide Laws, End Time
Our Politician are EVIL
Watchmen does not confuse truth with consensus The Watchmen does not confuse God’s word with the word of those in power…
American health care, as we call it today, and for all its high-tech miracles, has evolved into one of the most atrocious rackets the world has ever seen. By racket, I mean an enterprise organized explicitly to make money dishonestly.
All the official reassurances won’t be worth a bucket of warm spit. The Globals are behind the CoronaVirus, It Is a Man-Made Bioweapon.
The Bill and Melinda Gates Foundation Have NOT Got The Memo Yet, “Pestilences” Has No Cure
The Coronavirus Was Most Certainly Produced by Crazy (Un-Godly) Men in Laboratories, WGO and CDC Knew All Along That the Coronavirus Was a Bioweapon, There’re in Charge?
Well-known medical expert Bill Gates did an AMA on Reddit https://www.gatesnotes.com/Health/A-coronavirus-AMA?WT.mc_id=20200319223000_Coronavirus-AMA_BG-LI&WT.tsrc=BGLI&linkId=84658834 (transcribed here), in which he casually drops some chilling ideas into the conversation: Ummm, people of God! Am I late? Did I miss this? Did we see this already? Digital certificates to identify those who got the #Covid19 vaccines and TO DO BUSINESS?
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This Can Not Continue, “A Staggering Number”: Over $18 Trillion In Global Stimulus In 2020, 21% Of World GDP
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