with the financial and economic equivalent
of a meteor impact with shock wave?
supply chains, demand and mobility
will painfully spawn next
great tech-led economic models
Nobody, anywhere, could have predicted what we are now witnessing: in a matter of only a few weeks the accumulated collapse of global supply chains, aggregate demand, consumption, investment, exports, mobility.
Nobody is betting on an L-shaped recovery anymore - not to mention a V-shaped one. Any projection of global gross domestic product (GDP) in 2020 gets into falling-off-a-cliff territory.
In industrialized economies, where roughly 70% of the workforce is in services, countless businesses in myriad industries will fail in a rolling financial collapse that will eclipse the Great Depression.
That spans the whole spectrum of possibly 47 million US workers soon to be laid off - with the unemployment rate skyrocketing to 32% - all the way to Oxfam's warning that,
What we are witnessing is not only a massive globalization short circuit:
Their bodies may be blocked, but they are electromagnetic beings and their brains keep working - with possible, unforeseen political and other consequences.
Soon we will be facing three major, interlocking debates:
This is just a first approach in what should be seen as a do-or-die cognitive competition.
Yes, a new economic model should be revolving around these axes:
China, Japan, South Korea and Taiwan are very well positioned for what's ahead, as well as selected European latitudes.
Plamen Tonchev, head of the Asia unit at the Institute of International Economic Relations in Athens, Greece, points to the possible reorganization - short term - of Belt and Road Initiative projects, privileging investment in,
Covid-19 is like a particle accelerator, consolidating tendencies that were already developing.
China had already demonstrated for the whole planet to see that economic development under a control system has nothing to do with Western liberal democracy.
On the pandemic, China demonstrated - also for the whole planet to see - that containment of Covid-19 can be accomplished by imposing controls the West derided as "draconian" and "authoritarian," coupled with a strategic scientific approach characterized by a profusion of test kits, protection equipment, ventilators and experimental treatments.
This is already translating into incalculable soft power which will be exercised along the Health Silk Road. Trends seem to point to China as strategically reinforced all along the spectrum, especially in the Global South.
System failure welcomed?
In contrast, Western banking and finance scenarios could not be gloomier.
As a Britain-centric analysis argues,
As system failures go, nothing remotely approaches the possibility of a quadrillion dollar derivative implosion, a real nuclear issue.
Mega-pressure is on all those Wall Street outfits that gave oil companies the equivalent of puts on all their oil production at prices above $50 a barrel. These puts have now come due - and the strain on the Wall Street houses and US banks will become unbearable.
The anticipated Friday oil deal won't alter anything:
This is just the beginning and is bound to get much worse.
Imagine most of US industry being shut down. Corporations - like Boeing, for instance - are going to go bankrupt. Bank loans to those corporations will be wiped out.
As those loans are wiped out, the banks are going to get into major trouble.
Derivative to the max
Wall Street, totally linked to the derivative markets, will feel the pressure of the collapsing American economy.
In a nutshell:
No wonder New York business circles are absolutely terrified.
They insist that if the US does not immediately go back to work, and if these possibly quadrillions of dollars of derivatives start to rapidly implode, the economic crises that will unfold will create a collapse of the magnitude of which has not been witnessed in history, with incalculable consequences.
Or perhaps this will be just the larger-than-life spark to start a new economy...