The dire economics behind CoVid-19 outbreak

Let’s look at the CoVid-19 outbreak from the vantage point of economics.

At some point very soon there will come a time when the ramifications of China’s shutdown of manufacturing and shipping will become more fatal to humans than the coronavirus breakout.

This is the consequence of moving so much of our supply chain to southeast Asia including making prescription drugs.

So look for news coming out of China this week that factories outside of the major impacted centers of the virus will be reopened. What will the impact of this to the Chinese workers is unknown at this point.

However, it could take six months for China to get back to its manufacturing levels before the outbreak since the shipping of raw materials have been curtailed during the recent shutdown.

Now this position is not the reason for the Dow Jones index snapping back with a 1,294 point rise on Monday. No that solely can be pegged to Fed chair Jerome Powell saying it would become more accommodative to combat the virus outbreak.

This verbal injection of hopium from Powell will have limited effect on equity markets as futures Tuesday morning shows the Dow is up 150 points.

2 thoughts on “The dire economics behind CoVid-19 outbreak

  1. The virus itself is not the real epidemic as that is the panic itself. About 165,000 to 170,000 people die globally everyday from all causes of which various forms of Pneumonia so the numbers are rather insignificant.
    The real patient is the Global Economy especially the financial system which must be supported by any and all means. Sitting in positions of authority and decision making means you MUST be ahead in a world of near instantaneous communications. Waiting ‘to see’ only increases the destruction and cost as well as duration of repairs.
    Today we saw Mr. Powell deliver much too little way too late. At the minimum we need to see duration purchases by the Fed out to 30 years at the rate of 60B per month for 10 years likely maybe 100 years.

    Liked by 1 person

  2. Pingback: No spring ahead for US with Coronavirus outbreak | Gray's Economy

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