Here be Dragons, “Hic sunt dracones”
We have sailed off the map of the known world into totally uncharted waters. No one, including me, knows exactly where we are or where we are headed.
But hic sunt dracones is an excellent warning, here be dragons. If I was still flying and needed to give a brief to my passengers, I’d be saying, “I have some good news and some bad news. First the bad news. We have flown off the edge of my maps and we are totally lost without a clue as to where we are.”
“On the other hand, we are making great groundspeed.”
The Coronavirus continues to spread out of control. The best guess that I have been able to find about how many people would die came from the guy who led the fight against the SARS virus. This professor believes as many as 60% of the people in the world could catch the virus. According to him 45 million people in the world could die. Best guesses say that somewhere between 40 and 100 million people died of the Spanish Flu a hundred years ago. But it was a world with a third of the population of today.
In a normal year 57 million or so people die. After all, everyone is going to die of something. So adding on an additional 45 million is hardly the end of the world. Unless of course you happen to be one of those 45 million or related to them.
The real killer is going to be the knock-on effects of the virus and not many people are discussing them. That’s because we are off the map and in uncharted waters where frankly governments fear to swim.
Health care is going to be rationed. At some point if you are in the higher risk categories you will be sent home to die. We don’t have the hospital beds or ventilators for all those who might need them. In Italy in one area, if you were over 60 you were out of luck. And I don’t know anyone in the US yet talking about it but we have the most expensive medical care in the world. Who is going to pay the hundreds of billions of dollars for emergency care? Hospitals will be packed with virus patients and for anyone else suffering from anything else; going to the hospital will be a death sentence.
According to the gurus, 59% of Americans can’t find $1000 to cope with an emergency. When vast segments of business are simply shut down for weeks or months, how are people going to pay their bills, much less cope with an emergency? Look for property crime to explode higher.
Locks keep out honest people, not crooks. And with the police now stealing more from Americans than the burglars do, whom are you going to go to? In San Francisco the police don’t even want to report property crime unless it’s over $1000. That’s called a license to steal. What happens when the virus hits the street people in LA and San Francisco and Portland? Who is going to pay?
Well before the virus became big news, it was obvious to a lot of serious financial writers, including me, that the financial system was about to blow sky high. I started predicting the crash over a year ago. The Fed postponed it by flooding the financial system with cash starting in late September but the flood has become a tidal wave lately. Behind the curtain something very serious is happening but they don’t toss $5.5 trillion into the coffee and donut fund for nothing.
I believe the banking system is about to break on a permanent basis. Most of the people I read seem to think pumping money by Central Banks can solve the financial problems but let me remind my readers that the Central Banks pumping unlimited money into the system is what caused the problem. When you have too much debt, you cannot solve your debt problem with even more debt.
In 2007 the financial problem went back to subprime lending. Today out of control borrowing and spending by corporations will drown the banking world with defaults. We will have to have a jubilee and figure out how to go back to honest money. You cannot have an honest financial system or honest government without honest money.
The virus is not the cause of our financial problems or crime issues or stupidity in government. Face it folks, people go to work for the government because they are too lazy to work and too nervous to steal. The founding fathers would be astonished at the circus of clowns we have running government today.
All debt gets paid. It gets paid either by the borrower or by the lender but all debt gets paid. We have the biggest crisis in US and perhaps world history. We can only hope real leadership stands up, speaks out and takes charge.
The alternative is too dreadful to consider.