I will not drag it out--economy was in a deep shit before all this Covid-19 thingy. I broke keys on my keyboard writing about upcoming FUBAR in "economy" for at least a year, maybe more. I am and never was alone. Here is a opinion of one of many observers:
There are two related problems. The first is that the global economy was already in the emergency ward before the impact of Covid-19. Whether the economic actions being taken across the world – from unprecedented interest-rate cuts through to eye-watering trillions of dollar state spending – will stem the flow or not remains to be seen. Perversely, it could help to shake out many non- or under-performing sections of the economy, which could be a good thing in the long-term.
But he also gets to what I am trying to say also in the last week or so:
The second problem, and the more important one in the short-term, is that economic rationale is not what is driving policy; apocalyptic doom-mongering is. Provoked by the media, governments have been forced into a macabre competition of being seen to be acting. The ‘do something… anything’ approach has resulted in new performative displays aimed at placating the doom mongers, rather than address the health problem rationally. Many governments have been driven less by a reasoned, evidence-based strategy of limiting both the spread of the disease and the disorganisation of economic life, than by an urge to be seen to be taking action.
A-ha, that's warmer. Much warmer, in fact, it is down right hot. Some of those actions are down right insane, compounded by the lack of ANY verifiable data on actual number of infected people which, now it is possible to state with a considerable degree of accuracy, is much higher than so far reported 250,000 infected globally. As you may all understand, this growth (possibly by the order of magnitude) of infected cases, many of which may never be identified, will drive mortality rates from Covid-19 down dramatically.
I am keenly aware of the fact that operating even with the simplest linear extrapolations which put things into perspective may be beyond basic math skills of average Joe (or Jane) who can recognize some numbers but do not have proper apparatus for proper comparison. Here is a simple one:
Ah, how lovely, later this figure was downgraded to a mere, puny 60 million Americans, which is still roughly 20% of US population. But who counts, right? Well, here is the funny part, if to do even basic linear extrapolation on Swine Flu from April 2009 to April 2010, and whole two months since "reports" on Covid-19 started to pour in in earnest (granted, grossly unreliable in terms of actual number of infected) globally, we may arrive to a puzzling picture of the Swine Flu spreading faster by the factor of around 39 in the US alone, than the same happens currently with Covid-19....globally. This comparison, of course, becomes even more dramatic when one understands that global population is 7 billion/300 million=around 23 times larger than that of the US. Swine Flu killed 12,469 Americans.
So, let's put it in simpler terms: caution and even some quarantines are warranted and, in fact, maybe imperative but so far--these are media who are spreading the panic, which now completely got out of hand and is driving current multi-faceted crisis. So, it is clear that we all are not coming out of it the same. And, maybe, it is all for the better, because real drivers of this whole situation are not in the Covid-19 PR, what is shaping now to be a disaster, or in grossly overvalued US stock-market, which brought on the surface scumbags from political "elites", but in panic in regards to "oil wars". I already posted review of Scott Ritter's piece on what Russia is doing and I happen to agree that Russians do not see any value in talking to anyone in the US, including Trump himself, anymore. But I warned about this outcome for some time now. One can sense this mood of closure in Russia on the US really well. It is a well known fact, that:
The plunge in oil prices has put extreme pressure on the U.S. oil patch, which in aggregate needs oil in the upper $40s per barrel to be profitable. Companies like Continental Resources and Devon Energy, whose share prices were already under pressure, saw their market values cut in half after the outbreak of the price-war between Saudi Arabia and Russia.
But who said that Russia fights Saudi Arabia only? Saudis are not serious competitor to Russia. Russia fights Petrodollar, and with it, is finishing off Pax Americana. Now, no matter what Mnuchin says to Russians, it doesn't matter at all. Russians know that sanctions will continue and so be it. The pivotal point in all that is not even the fact of Russia being involved in some "oil-war". This is just one of the fronts. By far the most important "front" is that of Russia's National Projects which see Russia completely retooling herself (the process is ongoing as I Type this) into world's hi-tech hub, one of them. That's the real game.
As you might expect, Western perspective on these projects was and still is primarily shaped by a delusion of the so called Western "democracies" about themselves as ever-uncorrupted, truly "democratic" and economically prospering. Obviously, as last months has shown so explicitly, it is a complete malarkey. But, as practice shows, Western "elites" (political and business) are not very bright people to put it mildly. Reality of those national projects, however, is not what all those "analysts" trying to present. Here is an example of such incompetence, courtesy of Harvard madras of school for International Relations. Here is what those National Projects pursue in reality:
Furthermore, there is also the need to establish more linkages within the national projects among their key components – for example the inter-relation between the “digital economy” national project and the national projects of “Labour productivity”, “Infrastructure development”, “International cooperation and exports”
Read the whole thing, but notice the vector of development towards hi-tech exports, and here is the deal--the US is terrified of it. Why? If export of weapons is any indication--the US is not realistically competitive in a number crucial components of this very hi-tech export. Unless, of course, one believes that F-35 is a viable aircraft or Patriot is a competitor to S-400, which is, frankly, laughable. What's next? Commercial airspace. Here are some news, which are not good at all for Boeing (and Airbus too). Irkut started to assemble first SERIAL MC-21 which uses only Russian-made composite materials. You may recall that the United States sanctioned composite materials:
Russia has appealed against a US decision to impose sanctions against Aerocomposit, a company tasked with making wings made from lightweight composite material for its MC-21-300 airliner project which is currently undergoing prototype testing.Earlier Kommersant business daily wrote that the deliveries of materials for MC-21’s composite wings from the United States and Japan were halted due to the US sanctions against Aerocomposit
Russians know perfectly, even Putin stated not for once, anything Russia exports, and this export is increasingly hi-tech, will be sabotaged by the US. As was the case with SSJ-100s for Iran. SSJs are now being Russified from APU to engines as if there is no tomorrow. Same goes for Nord Stream-2, and the list is huge. So, knowing that, why not to remove the obstacle, especially the one which is self-destructing, by helping it to face some real trials. Simple as that. China? That is a separate issue here, especially in relation to Russia. This will require a separate post. So, this is the reality for this Friday. As Saudi proverb (allegedly) states: one Saudi prince once stated: "my grandfather rode a camel, my father rode a Mercedes, I ride Rolls-Royce, my grandson will ride camel again." Or as they used to say Sic Transit Gloria Mundi.