The+world+reels+in+fear+as+it+falls+down+a+%22water+fall+of+debt%2C%22+provoked+by+COVID-19.

Commdinginews

The world reels in fear as it falls down a "water fall of debt," provoked by COVID-19.

The Trilogy of Travesty

The story of the global economy during the age of COVID-19 and what might happen next.

May 15, 2020

The global economy can be compared to a medieval kingdom. The poorest countries can be compared  to the poorest peoples, then known as the “peasants” who toiled in the sun as they extracted  the food and resources which fueled the kingdom forward. “Middle man” countries such as China, are the craftspeople, artisans, and productive classes who produce and manufacture the products which fuel the consumer frenzy. While the developed countries are the “Kings”, nobles, and aristocrats who govern and buy in the most lavish quantities.
This dynamic is extremely complex, and if a single piece were to collapse, it would eventually bring about the collapse of the whole kingdom and in the era of COVID -19, it is this exactly this which is poised to happen…
The first stage was the closure of the stooge of the West. His greatest nemesis with whom he squabbles endlessly, but without who’s consumer satisfying demand quenching manufacturing, he cannot survive.
So of course, as the largest manufacturing economy, which accounts for 28.4% of the world’s manufacturing shut down, the world reeled in terror. It reeled in terror knowing that a threat to the integrity and continued function of the global supply chains had been established. The middleman was down, the one, which connected the two most distant worlds in this trilogy of travesty was no longer there to do so… China had fallen…
While the world’s second largest importer and largest exporter, didn’t buy the peasant’s raw resources or churn out the iPhones and auto parts of the West, questions began to be raised as to the reliability of the supply chain, the sustainability of its methods, and the possibility of continued profitability. Questions which were answered as companies like Apple said in mid-February that they would be forced to cut their production. But of course, these worries were swept away by new ones brought by COVID-19 as it made its crash upon the shores of the western world. And now two months, 30 million layoffs, and 65 thousand deaths later… here we are…
Now that brings us to the second phase, the phase in which we currently live. The developed world is where China was only a few weeks before, and now, China is the major economy which presides over the world and attempts to roar back to life in hope of getting back to business as quickly as possible. But there is one problem… they will not succeed.
For, now, the situation of China is not that bad or at least as bad as it could be, but there are a few problems…
Firstly, as the developed economies of the West are placed under stay-at-home orders, there is virtually anyone to buy the products that they are manufacturing…
Secondly, they must combat the unchangeable nature of human psychology. Which is hell bent on self-preservation and the protection of loved ones. Even if the governments of the Western World shovel trillions of dollars or Euros into the citizens and companies of their respective nations, it will not stimulate economic growth. It will only keep its citizens and companies afloat. Citizens and companies will not pump these trillions of dollars back into the economy, they will save it, they will make their payrolls, they will buy food, they will pay basic utilities, only pay off the essentials. And that is only if they have to.
They will not use these trillions of dollars to fuel the capitalist frenzy which thrives on the sale of the mostly useless or non-essential commodities which China and other “middleman” nations produce…
After all, when we are at home, there are no colleagues to impress, no potential loves to court, and no society to conform to. Therefore, we never go to the same lengths by the same means…
But wait! This is China we are talking about! The most populous nation on the face of there earth. The nation of 1.4 billion people with a booming and surging middle class!
Can’t they just buy their own products?! You may ask. Well…
Although the Chinese consumer market is a growing one, and despite the fact that it accounts for a significant portion of the population, China faces the same problem in its consumers that the West currently faces in theirs: physiology…
Since the death of Mao Zedong in 1976, the Chinese economy has grown every year for forty years. Until now… According to the Chinese Bureau of Statistics, the economy contracted 6.8 percent.
But after such months of national trauma, the perspective of the Chinese people has changed. Before the pandemic, much of the current Chinese workforce had only ever known a world of economic growth, one that had not contracted once in over forty years. They lived in an economy which seemed to be in direct contradiction and defiance of the laws of reality. As a result, when an economy booms, spending is higher, and people feel more secure and by virtue may save less. But, when the economy shrinks, spending shrinks because people feel less secure and instead, they save more.
And of course, even after trauma, people often keep saving, or choose to save more consistently, because they are traumatized… Which, understandably, hinders growth.
To make matters worse, if no one buys the products of China and the Chinese can’t buy them, then eventually, there will be no need to make them. After all, a surplus always translates to lower prices. Which is not good if your products are already notoriously inexpensive already… And if there are no products to be made, then there are no employees to be paid…
Of course, if the middleman stops manufacturing, then naturally, it will stop importing at least some of the resources that it requires to manufacture the products it is no longer selling. Such as cotton for the clothes or oil for the factories. In fact, China has even turned to cheap domestic coal to power its economic recovery. The fact that China issued more permits for coal plants in the months of February and March than they did last year may be indicative of such.
This is detrimental for the economies which rely on China and other “middleman” countries to buy their raw resources. Like those countries in the Persian Gulf or Africa. Countries which are also begging shut down and lock their economies, which brings us to the third book of this trilogy of travesty. The one which we have not lived, the fate of the poor world…
These nations know that if they experience a mass outbreak of COVID-19, that they will be hit the hardest, due to crowded slums and inferior health services.
The case is simple for the underdeveloped word, they would be decimated by the pandemic. The loss of life would be unfathomable and a recovery there would truly be difficult, costly, and time-consuming experience. Worse yet, such a collapse would leave global supply chains in tatters. The raw resources we use could become increasingly difficult to find as the population which currently cultivate these resources either remain at home or perish. Whether it be from COVID-19 or hunger…
It is no wonder that these governments may be so keen on ensuring that their citizens stay home, even if it means that given the countries current situations, “lock downs” themselves may prove to be lethal…
The global economy really is a tale of three different worlds, so seemingly distanced by geography and the human mind but yet so closely intertwined.
So closely intertwined are we, that as we cry out how unbearable phenomena from our comfortable homes and apartments it is the poor nations of the world who say:
“Cras nihi,” My turn tomorrow,

But the question is:
Will we be there for them?

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