aeronca1 said:
Sometimes, out of the dark cloud, emerges something that will change our future.
It's what's probably emerging beyond this that leaves me more uncertain than the spread of the virus.
The past twenty years has seen a dramatic rise in cost of living (housing primarily) coupled with historically low interest rates, leaving lower and middle class populations & governments in North America & Western Europe with a debt load that can simply be described as
grotesquely over-extended.
(The subprime mortgage crisis 2007-2010 in the 'States was a small scale dress rehearsal for what may be coming next....)
For a couple of decades here in BC, analysts have repeatedly cited that the average middle class family was existing one or two pay checks away from debt payment default. Their warnings described how things were so delicately balanced that it wouldn't take much to shove the greater working population off the edge, triggering a much larger economic domino effect.
Well.......here we go.
Regarding China, they're much better set-up than most in the West can imagine. At this stage, the Chinese industrial economy can operate strictly within the borders of the country and still service a population that's become affluent enough to create growth.
While the exploitation of the international economy was critical in the creation of China's staggering economic recipe, they're currently at a point where we may be little more than icing on the cake. (Mind you, that layer of icing might be almost as thick as the cake!)
With that in mind, you may next witness a very large buy-up of distressed international business interests by Chinese money once this C-19 business has all run it's course, by far eclipsing the vast Chinese based acquisitions of global corporate assets already up to present.
Everybody likes icing.
The medical media tells us that Covid-19 will have marginal effect on kids, and most adults up to middle age can expect survivable flu-like symptoms if they're in good health.
Seniors and people of any age with "challenged" immune systems can expect deadly consequences that can be overwhelming if encountering this virus.
Now, translate that little ditty into economic language:
China's economy is a young adult in a government control military-style athletic program, sucking back steroids all day long. It's simply loaded for bear at this stage.
Find me another economy, anywhere around the world, in that kind of shape?
All I can see are wheelchairs and walking aids, and maybe a few hopefuls still using training wheels to stay balanced.
And as a real-time update, here in Vancouver, BC, regular gasoline is hitting a buck-a-liter in the evenings (unseen in decades), city bus rides are free, but you come and go from the back door and leave the driver alone, and
Costco is refusing to refund returns on mass-hoarded toilet paper.
