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Discussion – COVID: Personal, National & Global Finances
There is great pressure to re-start the economy as the wave passes but this is not as simple as some are leading us to believe. While the shutdown measures have caused a plateau in new cases, hospitalisations and deaths which was needed to prevent a meltdown in our health services it has not done anything apart from that. China, and the other countries which saw their first wave before the west, have attempted to relax restrictions but in all cases are beginning to see case numbers rise again. Most of them have a far better understanding of what has been going on in their areas than we in the west have at present. What should happen is the lockdowns remain in place until the hospitals and care homes have recovered to a point they are no longer stressed and have surge capacity ready to cope with the new cases that will begin to show with any relaxation of the current measures.
This thread’s aim is to allow discussion of how we handle the economic stress the lockdown has caused and the knock on effects on all parts of our financial system.
Personal – If you have cash keep it, if you have credit use it, do not buy anything that is non-essential, assume things will not return to anything like normal for two years and that the financial damage will take a decade to sort out. I know that sounds dire, and it would be great if I am wrong, but I would plan for the worst and hope for the best.
National – Governments spend money they collect from us as taxes but if we are not economically active and making profits then they do not have any money to spend. At present they are shelling out to help keep us alive, housed and fed but that is not sustainable indefinitely.
Globally – Supply chain issues are beginning to bite, or more accurately nibble around the edges. China makes much of the tangible stuff we consume, apart from food, but has not done so for months. Now it is running at about 80% of normal levels which will help with the back log but its markets are running at 50% of normal demand. To make matters worse we have not sorted out how we are going to treat the merchant navies if they get sick at sea. Why would any cargo crew put to sea if they are not guaranteed good medical care at any port they may need to put into? They are stuck in limbo but 80% of goods are transported by sea. It takes 30 days to bring stock from east to west and the east cannot produce in the first place without fuel and raw materials.
I live in the UK and we do not produce most of the food we eat, fruit and veg come from southern Europe, meat from all over the world all the producing countries have their own problems. I was going to update an old bread baking thread but there has been no flour or yeast available in the local supermarkets for a month, even if I could pay for it. I am now one of the new millions of unemployed.
All of this needs to be thought about carefully and the supply chain problem is happening although it has been largely hidden as we consume the slack in the system. Anything made and shipped today will not start appearing as restock for weeks or months. We have had to deal with damping down the fire but it is not out, and will not go out, but we still need to plan for how we are going to handle the new normal.
There is great pressure to re-start the economy as the wave passes but this is not as simple as some are leading us to believe. While the shutdown measures have caused a plateau in new cases, hospitalisations and deaths which was needed to prevent a meltdown in our health services it has not done anything apart from that. China, and the other countries which saw their first wave before the west, have attempted to relax restrictions but in all cases are beginning to see case numbers rise again. Most of them have a far better understanding of what has been going on in their areas than we in the west have at present. What should happen is the lockdowns remain in place until the hospitals and care homes have recovered to a point they are no longer stressed and have surge capacity ready to cope with the new cases that will begin to show with any relaxation of the current measures.
This thread’s aim is to allow discussion of how we handle the economic stress the lockdown has caused and the knock on effects on all parts of our financial system.
Personal – If you have cash keep it, if you have credit use it, do not buy anything that is non-essential, assume things will not return to anything like normal for two years and that the financial damage will take a decade to sort out. I know that sounds dire, and it would be great if I am wrong, but I would plan for the worst and hope for the best.
National – Governments spend money they collect from us as taxes but if we are not economically active and making profits then they do not have any money to spend. At present they are shelling out to help keep us alive, housed and fed but that is not sustainable indefinitely.
Globally – Supply chain issues are beginning to bite, or more accurately nibble around the edges. China makes much of the tangible stuff we consume, apart from food, but has not done so for months. Now it is running at about 80% of normal levels which will help with the back log but its markets are running at 50% of normal demand. To make matters worse we have not sorted out how we are going to treat the merchant navies if they get sick at sea. Why would any cargo crew put to sea if they are not guaranteed good medical care at any port they may need to put into? They are stuck in limbo but 80% of goods are transported by sea. It takes 30 days to bring stock from east to west and the east cannot produce in the first place without fuel and raw materials.
I live in the UK and we do not produce most of the food we eat, fruit and veg come from southern Europe, meat from all over the world all the producing countries have their own problems. I was going to update an old bread baking thread but there has been no flour or yeast available in the local supermarkets for a month, even if I could pay for it. I am now one of the new millions of unemployed.
All of this needs to be thought about carefully and the supply chain problem is happening although it has been largely hidden as we consume the slack in the system. Anything made and shipped today will not start appearing as restock for weeks or months. We have had to deal with damping down the fire but it is not out, and will not go out, but we still need to plan for how we are going to handle the new normal.
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