Friday, July 31, 2009
A Fall Pandemic Could Open the Door to World Depression
Whether one subscribes to the theories of starting recovery, or attributes it to statistical skull drudgery and slight of hand, all can agree that the world continues to be in a very precarious position. Whether on its knees or with one leg up and trying to rise, a swift kick to the chest will send the body on its back.
Enter stage right, Nature or as some suspect, Laboratory Creationism: the H1N1 or better named Swine Flu virus. This hybrid virus, so similar in it transmittal patterns to that of the Spanish Flu, may just be the iron clad jack boot that finally collapses the chronic patients lungs and puts an end to the order as it presently stands. What comes next is any body's guess. But I am, dear readers, getting ahead of myself.
Everyone knows, or should know, that early to mid fall is known for two things: economic slow downs and the flu.
Summer vacation times are done. Back to school shopping in the developed world is done. The harvests are done. For many firms, the end of the fiscal calendar is also coming up, a time when accounts are rapped up not opened up. Further, due to the bad weather, the very thing that transmits the flu virus, economic activity also slows. In dear Russia and much of eastern Europe, heavy rains bring things to a grinding halt. This is also true to a smaller degree in western Europe, North America and east Asia.
Any actual or made believe recovery would have to survive this natural down cycle in the early to mid fall, to have a hope of being built upon in the late fall, early winter holiday season.
Unfortunately, other issues are playing against economic growth: illness. This is a season when regular flu cases skyrocket, the damp cold weather and closed crowded office spaces breeding disease. As such, lost productivity and wages abound. Enter Swine Flu.
Swine Flu, even if at only a quarter the strength of the Spanish Flu, will leave .25% of the infected population dead. It seems to spread and infect about the same amount of the population as Spanish Flu did, which also first showed up in spring, went quiet in summer and than roared the roar of death through fall. If a third of Europe's and America's combined 900 million people fall ill with Swine Flu and .25% die, that will leave 2.3 million bodies in a span of 3 months. While this may not seem to be a huge number and it isn't, the cumulative effect of hundreds of millions sick and a population paralyzed in fear of being sick will crush what is left of consumerism and manufacturing.
At the same time, it will place an incredible burden on already bankrupt and over stretched governments and their public services. Where will the money come from, in nations like America, UK or Hungary, to take care of their populations. Government collapse and surely economic collapse would await all of us in this winter of our combined discontent.