Coronavirus Crisis: A Critical Look

Nothing in life is to be feared, it is only to be understood. Now is the time to understand more, so that we may fear less.
Marie Skłodowska-Curie

After analyzing the background that we have exposed in previous articles along with new information, we present a critical look at the beginning of the current crisis.

As Yuval Noah Harari tells us in an article published by the Financial Times on March 20, 2020: “Humankind is now facing a global crisis. Perhaps the biggest crisis of our generation. The decisions people and governments take in the next few weeks will probably shape the world for years to come. They will shape not just our healthcare systems but also our economy, politics and culture“.

Late Reaction

You never know how soon it will be too late.
Ralph Waldo Emerson

We must indicate a late reaction from the responsible organizations and countries. While news arrived in November and December 2019 of the outbreak of a new and aggressive SARS-type virus (Coronavirus), the rest of the world continued to watched this situation from a distance.

Furthermore, in a statement issued on March 24, 2020, Reporters Without Borders maintains that “without the control and censorship imposed by the authorities, the Chinese media would have informed the public much earlier of the seriousness of the epidemic, saving thousands of lives and possibly avoiding the current pandemic” Ergo, the rest of the world had been alerted well before what was done.

To this we add that on October 18, 2019, weeks before the appearance of COVID-19, it took place the Event 201, led by The Johns Hopkins Center for Health Security together with the World Economic Forum and The Bill and Melinda Gates Foundation. Event 201 was a simulation exercise of a coronavirus-type pandemic that proposed problem scenarios in supply chains and cancellation of operations and travel. These types of simulations are normal exercises for The Johns Hopkins Center for Health Security.

Associated with the above, we would like to quote the words of Bill Gates in 2015 in the framework of a TED talk on epidemics: “You can have a virus where people feel well enough while they’re infectious that they get on a plane or they go to a market. The source of the virus could be a natural epidemic like Ebola, or it could be bioterrorism. So, there are things that would literally make things a thousand times worse”.

Therefore, with information that was not disseminated in time and recurrent simulations at the highest level, the specific measures have taken so long to be implemented, both by the countries and by the responsible global organizations. This would have prevented the expansion of the coronavirus in a timely manner.

Fear

Fear are nothing more than a state of mind.
Napoleon Hill

We are surprised by the reaction of the media to the classification of the Coronavirus as a pandemic by the WHO. Since, for example, the H1N1 outbreak (2009, origin in China) was also classified as a pandemic without having so much media coverage.

Along with this we must also consider the role played by social networks, with a much larger presence in 2020 than in 2009. In addition, the circulation of fake news, lies, hoaxes, etc. only instills fear in people. Let us not forget that the media has spoken for years about the arrival of a “great pandemic”.

The point is that fear, panic and hysteria are now evident in the population.

Shock

Injuries, therefore, should be inflicted all at once, that their ill savour being less lasting may the less offend.
Niccolò Machiavelli

We observe that several organisms agree that we are in shock. Andrea Enria, President of the Supervisory Board of the European Central Bank “The coronavirus is proving to be a significant shock to our economies“. The IMF, through its Managing Director, Kristalina Georgieva, points out that “we know that this shock is somewhat unusual as it affects significant elements of both supply and demand“. Even, the World Bank is its report is clear when saying that “In the coming weeks, all countries—even those without a single coronavirus patient—will need to take concrete policy steps to protect their people and limit harm to their economies“.

A state of shock mixed with rapid action leaves no room for questioning or analyzing the later scope of the measures taken.

There are some measures that should be analyzed carefully, such as:

  • Ensure the liquidity of the USD over other currencies.
  • Allow banks in Europe to operate below legal requirements.
  • Increase global debt, both public and private and both internal and external (read our article about debt concentration at BBB, on the junk bond limit)

Yuval Noah Harari indicates in the Financial Times that “Many short-term emergency measures will become a fixture of life. That is the nature of emergencies. They fast-forward historical processes. Decisions that in normal times could take years of deliberation are passed in a matter of hours. Immature and even dangerous technologies are pressed into service, because the risks of doing nothing are bigger. Entire countries serve as guinea-pigs in large-scale social experiments”.

A Critical Look

Finally, in conclusion, let me say just this.
Peter Seller

Injecting more liquidity and promoting more debt in the market will alleviate the coronavirus crisis in the short term, but it can have negative effects if it is not well directed and controlled. It might not even help those who really should.

The concept of post-shock adjustments, economic or social, is not uncommon in modern history. Both provoked events (dictatorships in South America, 1970s) and natural disasters (tsunami Sri Lanka, 2004) have occurred. In this regard, Naomi Klein points out that “during moments of cataclysmic change, the previously unthinkable suddenly becomes reality“.

Beyond everything, health, socially and economically speaking, we hope not to face a crisis that is too deep. Although apparently, we are heading for a depression that will be quite intense. The measures of some countries to protect the population are in the correct measure, but they will seem insufficient if this state of uncertainty is extended.

The stoppage of production, the interruption of supplies, the non-payment of debts, the increase in unemployment and the bankruptcy of some companies could worsen the scenario of economic recovery. However, what also have to be concerned about the social crisis: health, fear and trust between people will be damaged and history tells us that it is the most difficult thing to recover.

This coronavirus crisis is just beginning and we hope that the world will be able to overcome it soon. For this, selfishness must be forgotten because it is a global problem. It is also necessary that the leaders be at the height of the conflict, since the way out will be through collaboration between all the participants in society.

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