China

Ominous Warnings About The Very Rapid Spread Of The Coronavirus

February 25, 2020 by Michael

Is a widespread coronavirus outbreak inside the United States inevitable? After weeks of generally optimistic statements, officials are now warning us to prepare for the worst. Over the past several days we have seen the number of confirmed cases outside of China escalate dramatically, and this has really rattled global financial markets. After being down more than 1,000 points on Monday, the Dow Jones Industrial Average fell another 879 points on Tuesday. U.S. stocks have lost more than 1.7 trillion dollars in value in just two days. Much more importantly, a wave of tremendous panic is starting to sweep across America, and it looks like this crisis is just getting started.

Usually officials at the CDC choose their words very carefully so that they do not needlessly alarm the public. With that in mind, I would like for you to consider three statements that the CDC’s Dr. Nancy Messonnier made about a potential outbreak inside the United States during a press conference on Tuesday…

#1 “It’s not so much of a question of if this will happen in this country anymore but a question of when this will happen.”

#2 “Disruption to everyday life may be severe.”

#3 “We are asking the American public to prepare for the expectation that this might be bad.”

Can you ever recall a top CDC official ever making statements this ominous?

I certainly can’t.

In addition, Messonnier warned that it may soon become necessary for schools and businesses to greatly restrict person to person contact…

The CDC outlined what schools and businesses will likely need to do if the COVID-19 virus becomes an epidemic outbreak in the U.S. Schools should consider dividing students into smaller groups or close and use “internet-based tele-schooling,” Dr. Nancy Messonnier, director of the CDC’s National Center for Immunization and Respiratory Diseases, told reporters on a conference call. “For adults, businesses can replace in-person meetings with video or telephone conferences and increase teleworking options,” Messonnier said.

On a temporary basis such measures would not be too disruptive, but what if this virus just keeps spreading month after month?

We are potentially facing a scenario that is truly unprecedented, and it is becoming increasingly clear that officials have lost confidence that they will be able to contain this virus. In fact, one former U.S. official told USA Today that “the horse is out of the barn”…

Dennis Carroll, former director of the U.S. Agency for International Development’s Global Health Security and Development Unit, credited China’s “extraordinary control measures” with delaying the spread of the virus. But he said avoiding a pandemic is “very unlikely.”

“The dramatic uptick of cases in South Korea, Iran and Italy are reflective of a self-sustaining spreading of the virus,” Carroll, who now leads the Global Virome Project science cooperative, told USA TODAY. “And a clear message that the horse is out of the barn.”

At this point there are still only a few dozen confirmed cases in the United States, but authorities are bracing for the worst. If you can believe it, San Francisco Mayor London Breed just declared a state of emergency because of this virus…

Mayor London Breed declared a local emergency in San Francisco Tuesday amid the coronavirus outbreak, despite there being no confirmed cases among the city’s residents.

“Although there are still zero confirmed cases in San Francisco residents, the global picture is changing rapidly, and we need to step-up preparedness,” Breed said in a statement. “We see the virus spreading in new parts of the world every day, and we are taking the necessary steps to protect San Franciscans from harm.”

And after being quite apathetic about this outbreak at first, people all over America are suddenly realizing that they should be preparing for a potential pandemic.

In fact, Silicon Valley investor Geoff Lewis created quite a stir when he asked for advice on stockpiling food. The following is the question that he posted on Twitter that caused so much of an uproar…

If one were hypothetically stockpiling four months of shelf stable food, what would folks recommend (optimizing for keto friendly)?

We haven’t seen anything like this in the United States in a very long time.

But we haven’t even had a single death from this virus in our country yet. How crazed will people get when victims start dropping dead in the streets like they have been in Wuhan?

There is now talk that the IOC could potentially cancel or postpone the Olympic Games in Tokyo. At one time such talk would have seemed crazy, but this is how serious this outbreak has become.

In Iran, the number of confirmed cases has now jumped to 95, although many people believe that the true number is far, far higher.

During a press conference on Monday, Iran’s deputy health minister attempted to downplay the seriousness of this outbreak, but on Tuesday we learned that he has been infected too…

Iran’s deputy health minister said he has tested positive for the novel coronavirus and is in self-quarantine at his home just a day after he appeared at a news conference in Tehran where he sought to quell fears about the outbreak. Iraj Harirchi, the head of Iran’s counter-coronavirus task force, announced the illness in a video online while vowing that authorities would continue working to control the spread.

Apparently not wanting to be outdone, one of the officials in South Korea that was overseeing the response to this outbreak decided to jump off a bridge…

But in Seoul took on a more morbid tone Tuesday following reports in the local press that a civil servant from the Ministry of Justice’s Emergency Safety Planning Office jumped off a bridge in Seoul at around 5 am local time Tuesday.

The official was one of several individuals charged with overseeing the government’s response to the virus. As cases soar and hysteria mounts, we suspect this news won’t exactly help quiet the public’s nerves.

Suicide is never the answer to anything, and we should all be praying for that man’s family.

In Italy, the number of confirmed cases has grown by more than 15 times since Friday…

Over in Italy, the number of confirmed cases has surpassed 300 to 322, while the number of dead climbed to 10, according to Italian emergency chief Angelo Borrelli, who said the newly deceased were over the age of 80. That’s up from just 20 confirmed cases on Friday.

Newly deceased were over 80 years old, says at press conference in Rome Tuesday. The new infections include three cases in southern Sicily region, Italian Civil Protection official Borrelli said.

All of a sudden, people all over Europe are wanting to avoid Italians because of the potential of catching the virus. In most cases that fear is irrational, but we do know that an Italian just spread the virus to a hotel in Spain’s Canary Islands…

Hundreds of staff and tourists staying at a hotel in Spain’s Canary Islands were put under lockdown on Tuesday, El Pais newspaper reported. One person who had stayed at the establishment was later found to have tested positive for the coronavirus.

I lived in Italy for a few years as a child, and I have a great love for the country.

It is so sad to watch what is happening over there, but the same things are going to start happening here. In fact, Dr. Messonnier has told the public that now is the time “to begin preparing” for a massive outbreak…

“People are concerned about this situation – I would say rightfully so,” Messonnier said. “But we are putting our concerns to work preparing. Now is the time for businesses, hospitals, communities, schools and everyday people to begin preparing as well.”

If you do prepare and all of this turns out to be a false alarm, at least you will be ready for the next crisis that is coming.

But if you don’t do anything to prepare and things get really, really bad, it could end up costing you dearly.

If this virus starts spreading across the United States like wildfire, you and your family will want to minimize contact with the public as much as possible. So stock up on the things you will need now, because when things start getting really crazy the stores will be cleaned out very quickly.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

The “Unsinkable” Financial Markets Just Slammed Into A Massive “Iceberg” Called The Coronavirus

February 24, 2020 by Michael

We just witnessed the third largest single day point drop in U.S. stock market history, and experts are warning that things will only get worse if this coronavirus pandemic continues to escalate. On Monday, the Dow Jones Industrial Average was down a whopping 1,031 points, and it looks like there could be more volatility on Tuesday. In fact, the Nikkei is already down 787 points as I write this article. Of course this sudden decline is being mostly driven by fear of the coronavirus. The rapid spread of the virus in South Korea, Italy and Iran over the weekend really rattled investors, and there was a rush to sell stocks when the markets opened on Monday morning. And the worse this pandemic becomes, the lower stock prices are going to go.

You see, the truth is that stock prices are primarily based on what investors believe the future is going to look like.

For a long time, investors have assumed that the future would be exceedingly bright, and stock prices have steadily trended upwards.

But a coronavirus pandemic changes everything. If worldwide economic activity comes to a standstill like we are already seeing happen in China, it is inevitable that there will be a very serious global economic downturn.

And this outbreak comes at a time when stock prices have been more overvalued than they have ever been before in American history. Most stocks have been priced “beyond perfection”, and so it was just a matter of time before those prices started to fall.

As I have explained many times before, stock prices tend to fall much faster than they rise, and the rapid decline on Monday was quite breathtaking…

The Dow Jones Industrial Average closed 1,031.61 points lower, or 3.56%, at 27,960.80. The S&P 500 slid 3.35% to 3,225.89 while the Nasdaq Composite closed 3.71% lower at 9,221.28. It was the Dow’s biggest point and percentage-point drop since February 2018. The Dow also gave up its gain for 2020 and is now down 2% for the year. The S&P 500 also had its worst day in two years and wiped out its year-to-date gain as well.

Tech stocks got hit particularly hard.

If you can believe it, the stocks of the big tech companies “lost more than $250 billion in value” on Monday…

Apple, Facebook, Amazon, Microsoft and Google-parent Alphabet collectively lost more than $250 billion in value as part of a broader market plunge. The tech companies make up nearly one-fifth of the value of the S&P 500, which itself is down more than 3.6%. Apple has the largest exposure to China, as it relies heavily on Chinese manufacturing plants for its top products and on Chinese consumers to buy iPhones.

And overall, global stocks lost more than a trillion dollars in value to start the week.

Of course stock prices were so ridiculously inflated that the markets can easily absorb what happened on Monday.

What really matters is what happens next.

If U.S. authorities can keep this virus from spreading widely here in the United States, the impact on our economy won’t be that dramatic.

But if there is a widespread outbreak, all bets are off. More than a decade ago, the CBO conducted a study which examined this sort of a scenario, and what they discovered is definitely alarming…

CBO did a study in 2005 and 2006, modeling the impact of a 1918-sized flu pandemic on the economy. They found that a pandemic “could produce a short-run impact on the worldwide economy similar in depth and duration to that of an average postwar recession in the United States.” Specifically, a severe pandemic could reduce U.S. gross domestic product by about 4.5%, followed by a sharp rebound.

The CBO assumed that 90 million people in the U.S. would get sick, and 2 million would die. There would also be demand-side effects, with an 80% decline in the arts and entertainment industries and a 67% decline in transportation. Retail and manufacturing would drop 10%.

Personally, I think that those numbers are probably too optimistic.

In China, people are deathly afraid to leave their homes right now, and that has caused economic activity to come to a crashing halt.

In fact, during the first portion of this month vehicle sales in China were down 92 percent…

As The Epoch Times reported late last week, for example, sales of Chinese passenger vehicles has tanked a whopping 92 percent “on an annual basis the first 16 days of February,” according to the China Passenger Car Association.

Sales of passenger vehicles only amounted to 4,909 units during the first 16 days of the month, the organization reported, which fell from 59,930 vehicles sold over the same period a year ago. These are the first figures to demonstrate just how hard the Wuhan coronavirus is hitting the world’s largest auto market.

And at this point even Chinese President Xi Jinping is admitting that this outbreak will “have a relatively big impact on the economy and society”.

Up until now, the financial markets have been mostly overlooking the fact that the second biggest economy on the entire planet has been imploding because of this virus.

I think that many investors were assuming that this outbreak was just a temporary phenomenon, but now reality is starting to set in…

“The second-largest economy in the world is completely shut down. People aren’t totally pricing that in,” said Larry Benedict, CEO of The Opportunistic Trader, adding a 10% to 15% correction in stocks may be starting. He also said some parts of the market, particularly large-cap tech stocks, appear to be over-owned. “It seems like there’s much more to come.”

Hopefully U.S. stocks will bounce back on Tuesday. Following a decline of the magnitude that we just witnessed, that is often what happens.

And President Trump is certainly doing his best to keep everyone feeling optimistic. The following is what he tweeted on Monday…

The Coronavirus is very much under control in the USA. We are in contact with everyone and all relevant countries. CDC & World Health have been working hard and very smart. Stock Market starting to look very good to me!

Hopefully President Trump is correct.

And hopefully he is also correct when he claims that this pandemic will start to subside once warmer weather arrives.

But so far this mysterious new coronavirus is winning the battle, and investors all over the globe are really starting to freak out.

This Coronavirus Outbreak Just Took Some Bizarre New Turns

February 23, 2020 by Michael

Many were hoping that this coronavirus outbreak would begin to subside, but instead we witnessed an explosion of newly confirmed cases over the weekend. In fact, the number of confirmed cases outside of China has doubled over the past five days. If that number continues to double very rapidly, authorities will be talking about a full-blown “global pandemic” in no time. When I watched a victim suddenly collapse and start to twitch on a subway in Hong Kong, I thought about the sort of panic that would set off if that happened in New York. When I saw a video of Chinese authorities using butterfly nets to capture sick people, it made me wonder what U.S. authorities might do to round up those that are ill. The level of fear that a full-blown pandemic would cause would transform our society overnight. Even now, Chinese restaurants in Canada are completely empty due to concerns about catching this virus. But once this virus is being spread in virtually every city in North America, many of us won’t want to go anywhere at all, and that would bring economic activity to a complete and utter standstill.

For a while, it seemed like this outbreak was almost entirely a Chinese problem, and most Americans were not too alarmed about it. But over the weekend the rapid spread of the virus in South Korea, Italy and Iran spooked financial markets and mainstream news outlets in the U.S. started publishing stories about this outbreak with very alarming headlines.

And those alarming headlines are justified, because experts are telling us that we could very well be on the verge of a horrifying global pandemic…

“We are at a turning point in the Covid-19 epidemic,” said Lawrence Gostin, a global health law professor at Georgetown University. “We must prepare for the foreseeable possibility, even probability, that Covid-19 may soon become a pandemic affecting countries on virtually all continents.”

Once this virus starts to spread in a community, the number of cases can explode within hours. For example, the number of confirmed cases in South Korea went from 30 to 602 in just 96 hours…

Confirmed infections in South Korea have exploded over the last 96 hours from just 30 cases to 602 confirmed cases. Local residents there are scrambling to purchase preparedness supplies, stripping shelves bare and leading to a sense of urgency. Some cities in South Korea have already taken on a “ghost town” vibe, with streets emptied and nearly all community functions shut down.

And as I write this article, the number of confirmed cases in South Korea has now shot up to 763. By the time you read this article, it will probably be even higher.

In Italy, the number of confirmed cases went from 3 to more than 150 in just a couple of days…

In Italy, officials said a third person infected with the flu-like virus had died, while the number of cases jumped to above 150 from just three before Friday.

Authorities sealed off the worst affected towns and banned public gatherings in much of the north, including halting the carnival in Venice, where there were two cases, to try to contain the biggest outbreak in Europe.

Alarmingly, Italian officials can’t even figure out how the virus got to Italy in the first place, and then have now placed “almost a dozen towns” under quarantine…

Italian health authorities were struggling to find out how the virus started. “If we cannot find ‘patient zero’ then it means the virus is even more ubiquitous than we thought,” said Luca Zaia, the regional governor of the wealthy Veneto region.

Almost a dozen towns in Lombardy and Veneto with a combined population of some 50,000 have effectively been placed under quarantine.

This morning I went to take a look at the Serie A results from over the weekend, and I was particularly interested in seeing how Atalanta had done after their stirring Champions League victory last week. Unfortunately, their game was among three matches that were called off due to the virus…

On orders from the government, the Italian league games that were set to be played today – Inter Milan v Sampdoria, Atalanta v Sassuolo and Hellas Verona v Cagliari – were called off.

However three other matches in Genoa, Turin and Rome on Sunday were allowed to go ahead as scheduled with many fans wearing facemasks while sitting in the stands.

This is basically the equivalent of cancelling NFL games in the United States. It is something that simply does not happen under normal circumstances.

But these are not normal times.

There has also been an eruption of cases in Iran, and five of their confirmed cases have already died…

As of Sunday, Iran reported 28 cases, including 5 deaths — days after authorities there said they had no Covid-19 within their borders. Cases with links to Iran have already turned up in Canada and Lebanon.

Very quickly, the country’s narrative about the virus has changed. Schools and universities across the country are being shuttered as a “preventive measure,” along with some cinemas and restaurants, according to Al Jazeera.

So now we can’t just try to isolate ourselves from China and assume that everything is going to be okay.

This virus has already spread all over the world, and that means that it could come into the United States from almost any direction.

Of course China continues to be the epicenter of this outbreak. According to Epoch Times reporter Jennifer Zeng, there are tens of thousands of people in the hospitals in Wuhan, and crematoriums continue to burn bodies 24 hours a day…

50-60 K people in hospitals in #Wuhan, out of 18 cremators at a crematorium, 3 were burned out due to overuse. Other 15 in operation 24/7. Many families died out.

Here in the United States, we only have 35 confirmed cases so far, and many have been wondering why that number has stayed so low.

Well, perhaps it is because the CDC has only tested 414 people so far…

Given the tens of thousands of Chinese nationals entering the United States of America every month, the thousands of Chinese students and the many thousands of residents who are under “observation” by state health authorities in places like Washington and California, a reasonable person might expect that the CDC has so far tested at least 10,000 people for the CoVid-19 coronavirus. But guess how many the CDC has actually tested?

To the great shock of anyone paying attention, the CDC’s own website admits the agency has tested only 414 people in the entire country.

As I discussed the other day, there are thousands upon thousands of people currently under “self-quarantine” in the United States.

Why have the vast majority of them not been tested?

And it looks like the quarantine period being used in the U.S. and in much of the rest of the world may be way too short.

In fact, Chinese officials are telling us that one Chinese man “took 27 days to show coronavirus symptoms”…

A Chinese pensioner who took 27 days to show coronavirus symptoms has sparked fears that a 14-day quarantine is two weeks too short.

The 70-year-old man was infected with the killer virus in China’s Hubei Province and showed symptoms nearly four weeks later, the local government said on Saturday.

So we may be releasing countless numbers of potentially sick people back into the general population way too early.

This is a nightmare that is getting worse with each passing day, and if this turns into a true global pandemic the impact on the global economy is going to be off the charts.

We can get an idea of where things could be heading by taking a look at what is already happening inside China. Small businesses all over the nation are rapidly running out of cash, and in just a matter of weeks virtually all of them will be out of cash. The following comes from Zero Hedge…

Let’s start with Chinese businesses: while China’s giant state-owned SOEs will likely have enough of a liquidity lifeblood to last them for 2-3 quarters, it is the country’s small businesses that are facing a head on collision with an iceberg, because according to the Nikkei, over 85% of small businesses – which employ 80% of China’s population – expect to run out of cash within three months, and a third expect the cash to be all gone within a month.

Should this happen, not only will China’s economy collapse, but China’s $40 trillion financial system will disintegrate, as it is suddenly flooded with trillions in bad loans.

Now try to imagine what that might look like on a global scale.

We have never dealt with something like this in the post-World War II era, and there is still so much about this virus that is not known.

Personally, I am still hoping that this outbreak will start to fizzle out once warmer weather arrives. But so far nothing seems to be able to slow this virus down, and it appears that a “tipping point” has now arrived.

Most Americans Are Not Taking This Coronavirus Outbreak Seriously, And That Is Potentially Very Dangerous

February 20, 2020 by Michael

We still don’t know if this coronavirus outbreak will become a horrific worldwide pandemic or not, but what we have seen so far is definitely very alarming. People have literally been dropping dead in the streets, the Chinese government has locked down major city after major city, and the virus kept spreading very rapidly on a cruise ship off the coast of Japan even though a strict quarantine was instituted. Scientists that have studied the virus are telling us that it “could be 20 times more lethal than the flu”, and it binds to human cell receptors much more easily than the SARS virus did. Unfortunately, because the epicenter of this crisis is on the other side of the globe, most Americans are simply not paying much attention to it. In fact, most of the people that my wife and I have been talking to and hearing from don’t think that the coronavirus is much of a threat to the United States at all.

And if the coronavirus does start to become a problem in this country, a new survey has found that most Americans are quite confident that the government can handle it…

More than three in four Americans say they are very confident or somewhat confident in the US federal government’s ability to handle a coronavirus outbreak, a Gallup poll has found, a higher level of confidence than in previous health scares.

Gallup said the results were from a February 3 to February 16 poll that began just days after the Trump administration announced it would suspend entry of foreign nationals who had been to China in the previous two weeks.

Hopefully this coronavirus outbreak will not explode in North America and our normal lives will not be disrupted.

But considering what is happening over in Asia, it would definitely be prudent to take some precautions. Unfortunately, most Americans are not really doing much of anything to prepare for a potential pandemic at this point.

If a pandemic does not materialize, that won’t be a problem. But if this virus starts spreading like wildfire in the U.S., we are going to have a massive crisis on our hands.

The time to stop an outbreak from happening is at the very beginning, and the lack of urgency about this virus that we are witnessing from local health officials around the country is absolutely stunning.

According to NBC News, there are thousands of Americans that are currently “under voluntary self-quarantine”. These individuals have either recently traveled to China or they have recently had contact with someone that was infected.

As you might assume, a “voluntary self-quarantine” is not mandatory. Instead, NBC News says that it is “strongly encouraged”…

Self-quarantining isn’t mandatory, but it is strongly encouraged.

It’s up to the state and local health departments to decide how to manage residents under self-quarantine.

So anyone that doesn’t want to participate can feel free to mix with the general public as much as they want.

Isn’t that great?

And since it is “up to the state and local health departments to decide how to manage residents under self-quarantine”, there is no single set of standards that is being followed.

In other words, state and local health officials are free to make things up as they go along.

We aren’t talking about a small number of people either. In fact, more than 5,000 people are under self-quarantine in California alone…

The California Public Health Department said there are more than 5,400 such people in the state. In Washington state, 745 people have been asked to self-quarantine. Georgia health officials identified about 200 travelers.

The Michigan Department of Health and Human Services said more than 300 people were referred for monitoring.

All it takes is a couple of “super spreaders” to get a real good outbreak going, and to see such a lack of concern about preventing the spread of this disease is quite disheartening.

And this lackadaisical attitude has even extended to actual victims that have been confirmed to have the virus. The CDC specifically warned against putting infected people on the same flight with non-infected people, but the U.S. government did it anyway…

Fourteen Americans who tested positive for the Coronavirus were flown back to the US on a flight with over 300 people who were not infected, despite objections from the Centers for Disease Control and Prevention.

The flight was filled with people who were evacuated from the Diamond Princess cruise ship in Japan, which had been quarantined due to an outbreak of the virus.

Reading this sort of thing makes you want to tear your hair out.

Despite such extreme negligence, hopefully everything will be okay. But it should be noted that the CDC is telling hospitals that now “is the time to open up your pandemic plans and see that things are in order”…

“This is the time to open up your pandemic plans and see that things are in order,” Dr. Anne Schuchat, a top official of the Centers for Disease Control and Prevention, urged hospitals last week as an outbreak of a deadly new coronavirus ravaged much of China.

“For instance,” she continued, health-care providers need to plan for a “surge at a hospital, the ability to provide personal protective equipment for your workforce, the administrative controls and so forth that you might put place in a health care setting.”

Anyone that assumed that this crisis would be largely confined to China has been proven wrong. At this point, we have already seen significant outbreaks erupt in several other countries in Asia. In fact, there are now six other nations where “community spread” is taking place…

Japan
Singapore
South Korea
Taiwan
Thailand
Vietnam

Perhaps the most notable outbreak on that list is in South Korea. According to the Guardian, 31 brand new cases were announced on Thursday…

The South Korean city of Daegu was facing an “unprecedented crisis” after coronavirus infections that centred on a controversial “cult” church surged to 38 cases, accounting for nearly half of the country’s total.

The city of 2.5 million people, which is two hours south of the capital Seoul, was turned into a ghost town after health officials said the bulk of country’s 31 new cases announced on Thursday were linked to a branch of the Shincheonji Church of Jesus.

If we don’t want the same thing to happen here, we need to take this virus very seriously.

Unfortunately, that is simply not happening, and all of us could end up paying a great price as a result.

Global Crop Failures Continue: In Australia This Is Going To Be The WORST HARVEST Ever Recorded

February 19, 2020 by Michael

Global food production is being hit from seemingly every side. Thanks to absolutely crazy weather patterns, giant locust armies in Africa and the Middle East, and an unprecedented outbreak of African Swine Fever in China, a lot less food is being produced around the world than originally anticipated. Even during the best of years we really struggle to feed everyone on the planet, and so a lot of people are wondering what is going to happen as global food supplies become tighter and tighter. The mainstream media in the United States is so obsessed with politics right now that they haven’t been paying much attention to this emerging crisis, but the truth is that this growing nightmare is only going to intensify in the months ahead.

In Australia, conditions have been extremely hot and extremely dry, and that helped to fuel the horrific wildfires that we recently witnessed.

And everyone knew that agricultural production in Australia was going to be disappointing this year, but it turns out that it is actually going to be the worst ever recorded…

Australia’s hottest and driest year on record has slashed crop production, with summer output expected to fall to the lowest levels on record, according to official projections released Tuesday.

The country’s agriculture department said it expects production of crops like sorghum, cotton and rice to fall 66 percent — the lowest levels since records began in 1980-81.

The continent of Australia is considered to be one of the breadbaskets of the world. According to the U.S. Department of Agriculture, in 2018/19 Australia exported over 9 million tons of wheat to the rest of the world.

But thanks to relentless crop failures, Australia has started to import wheat, and that is likely to continue for the foreseeable future.

So instead of helping to feed the rest of the world, Australia is now relying on the rest of us to help feed them.

And what is happening this year didn’t just barely break the old records. In fact, one senior economist says that this will be the worst summer crop production the country has ever seen “by a large margin”…

“It is the lowest summer crop production in this period by a large margin,” Peter Collins, a senior economist with the department’s statistical body ABARES told AFP.

Of course if the rest of the world was doing great we could certainly survive a downturn in Australia.

Unfortunately, that is definitely not the case.

Right now, billions upon billions of locusts are voraciously devouring farms in eastern Africa and the Middle East. As I detailed the other day, giant armies of locusts the size of large cities are traveling up to 100 miles per day as they search for food. When they descend on a farm, all the crops can be consumed literally within 30 seconds. It is a nightmare of epic proportions, and UN officials are telling us that this crisis is only going to get worse over the next couple of months.

In Uganda, the army has been called out to help fight this locust plague, but it is making very little difference…

Under a warm morning sun scores of weary soldiers stare as millions of yellow locusts rise into the northern Ugandan sky, despite hours spent spraying vegetation with chemicals in an attempt to kill them.

From the tops of shea trees, fields of pea plants and tall grass savanna, the insects rise in a hypnotic murmuration, disappearing quickly to wreak devastation elsewhere.

The most effective way of fighting these locust swarms is to spray insecticide on them from the air, but even that only produces very limited results.

However, at least it is better than doing nothing.

The UN is trying to raise a lot more money to get more planes into the air, because if nothing is done the number of locusts “could grow up to 500 times by June”…

The U.N. has said $76 million is needed immediately. On Tuesday, U.S. Secretary of State Mike Pompeo during a visit to Ethiopia said the U.S. would donate another $8 million to the effort. That follows an earlier $800,000.

The number of overall locusts could grow up to 500 times by June, when drier weather begins, experts have said. Until then, the fear is that more rains in the coming weeks will bring fresh vegetation to feed a new generation of the voracious insects.

Overall, these locusts are affecting nations “with a combined population of nearly 2 billion”, and the amount of food that these locusts are destroying is unprecedented.

Meanwhile, China has been dealing with the worst outbreak of African Swine Fever in history.

African Swine Fever does not affect humans, but it sweeps through herds of pigs like wildfire. There is no vaccine, there is no cure, and once African Swine Fever starts infecting pigs in a certain area the only thing that can be done is to kill the rest of the pigs to keep it from spreading anywhere else.

Unfortunately, China has not been able to get this outbreak under control, and the losses have been staggering.

According to the New York Times, the number of pigs that have been wiped out in China already is equivalent to “nearly one-quarter of all the world’s pigs”…

The disease was first reported in Shenyang, Liaoning Province, in early August 2018. By the end of August 2019, the entire pig population of China had dropped by about 40 percent. China accounted for more than half of the global pig population in 2018, and the epidemic there alone has killed nearly one-quarter of all the world’s pigs.

But of course China is not the only one dealing with African Swine Fever.

In fact, cases of African Swine Fever have now been identified “in 50 countries”, and U.S. pig farmers are deathly afraid of what would happen if this disease starts spreading here.

As a result of this crisis, pork prices in China have gone through the roof, and many families are no longer able to eat pork at all.

Never before in the modern era have we seen so many major threats to global food production emerge simultaneously.

There are more than 7 billion people living on our planet today, and we need to be able to grow enough food to feed everyone.

If we aren’t able to do that, food prices will start to get really high, and people in the poorest areas simply will not have enough food to feed their families.

Shocking New Study Says The Coronavirus “Could Impact More Than 5 Million Businesses Worldwide”

February 17, 2020 by Michael

When was the last time that we witnessed a disaster that severely disrupted the supply chains of over 5 million companies around the globe simultaneously? Looking back over the past couple of decades, I can’t think of one. In recent days I have written a number of articles about the economic impact of this coronavirus outbreak, and what we have seen so far could be just the beginning. With each additional week that much of the Chinese economy remains at a virtual standstill, things are going to get even worse. Today, China accounts for approximately 20 percent of global GDP, but that doesn’t tell the entire story. At this point the rest of the world has become so dependent on Chinese exports that any sort of an extended shutdown for Chinese manufacturing would be a complete and utter nightmare for global supply chains. In fact, a brand new study that was just released by Dun & Bradstreet has concluded that the coronavirus outbreak in China “could impact more than 5 million businesses worldwide”…

The new coronavirus outbreak and subsequent shutdown of huge swathes of China could impact more than 5 million businesses worldwide, according to a new study.

A special briefing issued by global business research firm Dun & Bradstreet analyzed the Chinese provinces most impacted by the virus, and found they are intricately linked to the global business network.

Many people may assume that we could just “make these things somewhere else”, but that isn’t so easy.

New factories would have to be built, workers would have to be trained, etc.

And as Harvard Business School’s Willy Shih has pointed out, there are “some things that are only made in China these days”…

There are some things that are only made in China these days, and not just the usual electronics and toys — consumer products — it’s active pharmaceutical ingredients that go into pharmaceutical supply chains worldwide.

So what is going to happen if economic activity in China does not return to normal any time soon?

That is a very good question. Unfortunately, there will be shortages, and global supply chains will become incredibly strained.

According to the brand new study from Dun & Bradstreet that I mentioned above, 938 of the Fortune 1000 companies have at least a “tier 2” supplier in the region…

Dun & Bradstreet researchers found that at least 51,000 companies worldwide, 163 of which are in the Fortune 1000, have one or more direct or “tier 1” suppliers in the impacted region, while at least 5 million — and 938 in the Fortune 1000 — have one or more “tier 2″ suppliers.

The impact on businesses in China and around the world is already dragging down economic growth forecasts for the year.

In some cases, the breakdown of global supply chains will simply lead to higher prices for western consumers.

But in other cases there will come a point when certain products are not available at all. The following comes from Zero Hedge…

A new poll via Shanghai’s American Chamber of Commerce (AmCham) discovered that 50% of US firms operating in China say shutdowns of factories have impacted their global operations due to the Covid-19 outbreak, reported Reuters.

About 78% of these firms warn that their staffing is currently short at the moment, which would prevent the resumption of full production, leading to massive shortages of products in the next several months for Western markets.

Massive shortages of products?

That doesn’t sound good at all.

Hopefully this outbreak will start to fizzle out and such an ominous scenario will not materialize. But at this point even Apple is admitting that revenue will be well below expectations this quarter. In explaining this to the public, Apple cited a couple of reasons…

The first is that worldwide iPhone® supply will be temporarily constrained. While our iPhone manufacturing partner sites are located outside the Hubei province — and while all of these facilities have reopened — they are ramping up more slowly than we had anticipated. The health and well-being of every person who helps make these products possible is our paramount priority, and we are working in close consultation with our suppliers and public health experts as this ramp continues. These iPhone supply shortages will temporarily affect revenues worldwide.
The second is that demand for our products within China has been affected. All of our stores in China and many of our partner stores have been closed. Additionally, stores that are open have been operating at reduced hours and with very low customer traffic. We are gradually reopening our retail stores and will continue to do so as steadily and safely as we can. Our corporate offices and contact centers in China are open, and our online stores have remained open throughout.

Needless to say, U.S. financial markets are not responding favorably to this announcement.

But what is happening elsewhere is nothing compared to the economic nightmare that is unfolding inside of China right now.

Because of the virus, very few people even want to leave their homes. As a result, consumer spending has almost entirely disappeared.

In fact, one CEO claims that there is virtually “no domestic consumption” in China right now…

Alan Lim of E-Services Group says there is “completely no domestic consumption” now and “factories are, at best, this week at 25% production … you need approval by the government to say you [can] work.”

Of course it is entirely possible that what is taking place in China could start happening elsewhere if this virus continues to spread.

The total number of confirmed cases outside of China is rapidly approaching the 1,000 mark, and that isn’t something to be extremely alarmed about yet.

But if that number continues to rise at an exponential rate, we will soon see a tremendous amount of panic all over the globe, and that will be extremely bad news for the entire global economy.

Japan’s GDP Is Collapsing, And Experts Are Warning That China Will Be Next

February 16, 2020 by Michael

Global economic conditions are really starting to deteriorate quite rapidly. Economists were projecting that Japan’s GDP would shrink by 3.8 percent on an annualized basis in the fourth quarter, but instead it greatly surpassed expectations by plunging 6.3 percent. If Japan’s GDP falls again during the first quarter of 2020, and thanks to the coronavirus outbreak that seems very likely, then the world’s third largest economy will officially be in a recession. But of course the outlook for China is even worse. At this point, economic activity in China has come to a standstill, and this has thrown global supply chains into a state of chaos. It certainly appears that the entire global economy will shrink during the first quarter, and that will be the very first time that has happened in more than a decade. And if this coronavirus outbreak continues to intensify in the months ahead, the economic consequences are going to be absolutely catastrophic.

Even though the experts were anticipating a slowdown in Japan, nobody had any idea that it would be this bad…

Japan’s gross domestic product shrank at an annualized pace of 6.3 percent from the previous quarter in the three months through December, according to a preliminary estimate by the Cabinet Office released Monday.

Economists surveyed had predicted a fall of 3.8 percent, flagging the adverse impact of a sales tax increase, weak global demand and typhoon disruption.

The sales tax increase is being primarily blamed for this collapse in GDP, and without a doubt consumer spending in Japan was way down last quarter…

Consumer spending fell 11.1% after the national sales tax was raised in October to 10% from 8%. During the same month, Typhoon Hagibis ravaged a large swathe of the country.

Capital spending declined 14.1% and exports slipped 0.4% due to the fallout from the U.S.-China trade war.

Japanese officials were hoping that GDP would bounce back this quarter, but now the coronavirus outbreak has changed everything.

At this point it is very difficult to be positive about the immediate future of the Japanese economy, and an increasing number of experts are now anticipating a recession. Here is one example…

“I’m getting ready for another contraction in Japan’s first quarter. There just aren’t any positive factors to build a positive growth forecast,” said Mari Iwashita, chief market economist at Daiwa Securities Co., flagging her view that the economy is likely falling into recession.

The Japanese economy greatly benefits from the horde of tourists that usually come over from China, and the two nations have developed a very close trading relationship.

Now that those two factors are being disrupted, the outlook for the second quarter is decidedly grim…

“There is a good chance of Japan’s economy falling into a recession,” Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute, said before Monday’s data was released. He flagged the risks of supply chains being affected if the outbreak was prolonged.

The coronavirus is taking a toll on the number of Chinese tourists to Japan and manufacturing activity due to the economy’s close ties with China, prompting some economists to forecast a contraction lasting two quarters.

Ultimately, it is going to be exceedingly difficult for Japan to avoid a recession.

But if Chinese GDP also plunges into recession territory this year, that will be even bigger news.

According to the New York Times, “the entire global economy could suffer from a prolonged shock in China”, and so investors will be watching the development of this crisis very carefully.

The number of confirmed cases and the official death toll both continue to rise, and the draconian measures that the Chinese have taken to contain the outbreak have slowed the Chinese economy to a crawl. The following is how Zero Hedge summarized the recent economic data that we have seen come out of China…

While not perfect, and certainly not a comprehensive view of what is really taking place “on the ground”, the above data is a useful real-time indicator of how the people in China perceive the threat of the coronavirus pandemic, and one thing is abundantly clear: as the pandemic spreads further without containment, and as the charts above flatline, so will China’s economy, which means that while Goldman’s draconian view of what happens to Q1 GDP is spot on, the expectation for a V-shaped recovery in Q2 and onward will vaporize faster than a vial of ultra-biohazardaous viruses in a Wuhan virology lab.

Of course many in the financial world are still hoping that things won’t be too bad.

For example, Dun and Bradstreet is hoping that the crisis in China will only “cause a drag of approximately one percentage point on global GDP”…

China, the world’s second largest economy after US, contributes about 20 percent to the world’s gross domestic product (GDP). However, according to a report by Dun and Bradstreet, the Chinese economy might cause a drag of approximately one percentage point on global GDP if prevention of Coronavirus gets delayed beyond the summer of 2020.

That is a wildly optimistic projection, but hopefully they are right.

Hopefully the coronavirus will fizzle out with the arrival of warmer weather and the global economy can start to get back to normal.

Unfortunately, a return to “normal” is probably not in the cards.

Even before this coronavirus outbreak, the global economy was really starting to slow down. Economic numbers were absolutely dismal all over the world, and many experts were warning that we were right on the verge of the next global recession.

Now that this outbreak has erupted, we definitely have much more momentum in a downward direction. Very challenging times are ahead, although most people in the western world still don’t understand what is happening.

As far as the coronavirus is concerned, the key will be what happens to the number of confirmed cases outside of China. Over the past week that number has roughly doubled, and if that keeps happening every week we will soon have a full-blown global pandemic on our hands.

There are now 75 confirmed cases in Singapore, 59 confirmed cases in Japan and 57 confirmed cases in Hong Kong. It is becoming increasingly difficult to keep this virus contained, and we are rapidly approaching a major tipping point.

World Economy Projected To Shrink For First Time Since 2009 As Coronavirus Plays Havoc With Global Supply Chains

February 13, 2020 by Michael

For more than a decade, the global economy has steadily grown quarter after quarter, but it looks like that streak is about to come to a very abrupt ending. The coronavirus outbreak in China has brought the Chinese economy to a virtual standstill, and as a result critical supply chains are in a state of chaos all over the world. And since it doesn’t look like the Chinese economy will be able to return to normal for an extended period of time, it appears that a worldwide economic slowdown is imminent. I warned about this the other day, but now we have even a clearer picture of what is happening. According to Capital Economics in London, this coronavirus outbreak will cause the global economy to shrink this quarter, and that will be the very first time this has happened since 2009…

The economic casualties from China’s coronavirus epidemic are mounting as Asian and European auto plants run short of parts, free-spending Chinese tourists stay home and American companies brace for unpredictable turbulence.

That’s just the start of a financial hangover that is expected to linger for months even if the flulike illness is soon brought under control, economists and supply chain experts say. The Chinese epidemic’s aftereffects will likely cause the global economy to shrink this quarter for the first time since the depths of the 2009 financial crisis, according to Capital Economics in London.

And if the global economy shrinks for two quarters in a row, that will officially meet the definition of a “global recession”.

So here we are on the verge of the worst economic downturn in more than a decade, and even if this outbreak miraculously ended tomorrow it would still take quite an extended period of time for global supply chains to return to normal.

In particular, the auto industry has been hit extremely hard…

The ripple effects of China’s shutdown are spreading, with the auto industry especially hard hit. Nissan temporarily closed one of its factories in Japan after running short of Chinese components, one week after Hyundai in South Korea did the same. Fiat Chrysler warned that it may shutter one of its European plants. Some U.S. manufacturers could face parts shortages in one to two weeks.

“I worry that it’s going to be a bigger deal than most economists are treating it as right now,” said Mohamed El-Erian, chief economic adviser at Allianz, the German financial services company. “It will take time to restart all these economic engines.”

Of course the global economy was already slowing down before this coronavirus outbreak started, but this has definitely helped to accelerate our problems.

One big red flag is the fact that Caterpillar’s sales are suddenly dropping. After “33 consecutive months of increases”, Caterpillar’s sales have now fallen for two months in a row. In fact, January’s enormous 7 percent decline caught many analysts completely off guard…

If Caterpillar is still the global industrial bellwether and leading manufacturing sector indicator it has been for the past century (and absent the Fed somehow printing buildings or excavating mines, it is), then the world is about to enter the worst manufacturing downturn since the financial crisis.

According to CAT’s latest retail sales data, in January the company posted a 7% drop in machine sales, the biggest drop since Jan 2017, and only the second consecutive negative print since December’s -5% drop following 33 consecutive months of increases.

Across the Atlantic, major supply chain headaches have contributed to stunning factory output declines throughout the eurozone.

Just check out these numbers…

Factory output fell by 4.1 percent in the final month of the year compared with the same month a year earlier, according to figures published by Eurostat on Wednesday. Germany was among the states which suffered the most, as production dropped by 7.2 percent. Italy was close behind on a 4.3 percent decrease while France was down 3.2 percent.

Those numbers absolutely scream “recession”, and they aren’t likely to get any better until this coronavirus outbreak is over.

So all eyes will continue to be on China, and right now activity in major Chinese cities is way, way below normal. The following comes from Zero Hedge…

Specifically, Morgan Stanley suggested that real time measurements of Chinese pollution levels would provide a “quick and dirty” (no pun intended) way of observing if any of China’s major metropolises had returned back to normal. What it found was that among some of the top Chinese cities including Guangzhou, Shanghai and Chengdu, a clear pattern was evident – air pollution was only 20-50% of the historical average. As Morgan Stanley concluded, “This could imply that human activities such as traffic and industrial production within/close to those cities are running 50-80% below their potential capacity.”

If the number of cases continues to rise at an exponential rate, there won’t be a “return to normal” any time in the foreseeable future.

So barring some sort of a miracle, we should all settle in for a very long global economic downturn.

But at least one small segment of the global economy is booming at the moment. Thanks to fears about the coronavirus, demand for private jets has absolutely skyrocketed…

Wealthy travelers and major corporate clients are rejecting commercial airline travel and looking to private jets as a way to isolate themselves from the deadly coronavirus outbreak.

The uptick in interest comes as more airlines cut scheduled flights to and from mainland China and Hong Kong in the wake of the spread of the disease that originated in the Chinese city of Wuhan.

The elite are going to do all that they can to insulate themselves from this virus, and considering how easily it spreads, it is hard to blame them.

As I discussed earlier this week, a prominent medical expert in Hong Kong is warning that 60 to 80 percent of the total world population could ultimately end up catching this virus. And if that were to happen, it would greatly escalate all of the other problems that we are currently facing.

I am still hoping that such a scenario is not going to happen.

I am still hoping that global authorities can get this horrible virus under control soon, but with each passing day it is becoming more difficult to be optimistic about this outbreak.

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