The quality of the models being used by politicians to set COVID-19 policy is only as good as the data collected. Unfortunately, the data is not very good. Meanwhile, real costs arise from the ruined economy.
Can the US dollar lose its global reserve position? Sure it can, but not to a country that decides to commit the same monetary follies as the Fed. Most countries are trying to out-inflate the Fed. And that's good for the Fed.
We are about to enter a production slowdown—a collapse, really—not because some businesses miscalculated their investments, but because government intervened drastically and without warning to shut down all businesses.
The US and the world will rise from this crisis. What the government has to do is allow it. The government is there to facilitate, not to pick winners and losers.
Even if the COVOID-19 virus turns out to be more severe than the skeptics give us reason to think it is, we can get through it. We cannot survive the end of the division of labor. It would be the finish of civilization as we know it.
There is a reason to panic. But the panic should be over how governments—who know so very little about the virus that they have decided warrants destroying the global economy—will create many new threats to health and well-being through their policies.
Philipp Bagus reports from Spain: when people are frightened enough, they'll let the state do pretty much anything.
It is very likely that the shutdown of major developed economies will be followed by a shutdown of emerging markets, creating a supply shock as we have not seen in decades.
Eurocrats might be able to get tables in their favoured restaurants more easily while national governments take it on the chin. But this is a temporary situation which could easily evolve into a threat against the union.
As the nation-states take the brunt of their economic collapses on the chin, they will begin to realise that the EU superstate is little more than an obstructive and costly irrelevance.
