Ominous Signs

Year 2020 will probably be a turning point in the history of human civilization. There were very few periods in history when an entire human race was held hostage to a morbid fear of sickness and death, across almost all nations and vast geographies. The COVID19 or the Coronavirus or Wuhan Virus, whichever is the name given, is officially a Pandemic and has already affected more than 200,000. The figure is going on increasing. China has apparently now shut it out but no one knows if it won't strike again. America, Britain and continental (Western) Europe are down and out. Italy is the biggest casualty, others are following. Pope's closeness to God has not spared Vatican, apparently God does not believe in nepotism. In the Middle East Allah is not too pleased with Iran, although some ingenious Indian Muslims claim that the very name of Corona is derived from Koran. Now it is apparent that the casulaty figures are going to increase. In India its the sheer stupidity and brazenness of few spoilt brat are causing the virus to spread. Religious congregations are adding fuel to the fire.

Now the economic impact of Corona is not fully understood but all economists worth their salt is certain of a recession. Some are fearful of an economic disaster far surpassing the housing bubble of 2008 and comparing the crisis with the Great Depression. Millions in the travel, tourism, hospitality, service, manufacturing may lose jobs because of inadequate demands. China has lost production capacity and may withdraw investments from the markets like US resulting in its housing market bubble to burst. World is sitting on a corporate debt volcano. Total debt to GDP ratio is now more than 350%. Corona may have just accelerated a crisis that was bound to happen any way. The bubble was to burst. Economy which was supposed to grow by 2.8% prior to Corona will possibly now not grow at all, atleast for the next two quarters. Severe loss of consumer sentiments and bankruptcy may become norms, with flight of capitals. Fed Governments will declare hefty stimulus but with the fundamentals going haywire, this may not work anymore. After all, to what extent can the interest rates be cut if they are already hovering at near zero rates?

Oil prices are going Southwards, triggering a production war between Saudi and Russia. China is eager to recoup its losses, looking for new resources. Britain's Brexit deal is not going to be too sweet. It is going to depend on the big brother America. Big brother faces a tough election time. Any mismanagement on Corona and economy may cost Trump reelection.

The geopolitical scene is also not encouraging. A belligerent Turkey is trying to push immigrants across Europe through Greece and Greece is fighting a mammoth battle to evict them. Turkey will become increasingly hostile. Putin's Russia is already making threats against NATO. Russia and China see an opportunity to bring down Europe to its knees by buying resources for launching economic war, now that stock prices are hitting rock bottom. Investors are panicked. Russia and China may also dump US Dollars and therefore T bonds may not yield results. Debt level of US is at an all time high and with fiscal packages to stimulate economy in an election year it may go further Southwards. Nations like Lebanon are bankrupt and a host of South American Nations may follow suit. Every major economy is in deep Red including that of Australia, Europe & Britain

This is the perfect time for a World War to happen. Most of the great wars are triggered on account of economic conditions. The leaders think that they can make quick gains but soon the small battles go out of control and they make mistakes after mistakes. In their bid to gain more power and resources and also to divert the attention of the people from economic woes that would surely engulf the major powers, they may engage in short term hostilities which may flare up. Already Middle east is burning.  When unemployment rises, when production falls as demand falls, when discontent rises, there are revolts in every country. Internal dissents pave the way for external hostilities. World seems to be moving towards that direction. Geopolitics is complicated but when the politicians are after selfish interests they can do anything. Russia has already sounded warnings on NATO, China is too concerned about Hong Kong and pro independence movement in Taiwan. Turkey is locking horns with Syria and Greece - Erdogan is ambitious, fundamentalist and foolish all combined, a dangerous concoction.

Interesting times, ominous signs!