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The new Coronavirus economy 20:13 - Mar 26 with 2127 viewsDarth_Koont

I'm trying to find any websites where this is made clear but it's an intriguing problem: What's the model for an economy that pretty much stops? The G20 are committing to putting 5 trillion into the economy but isn't it just going to be like treacle? Where's it going to move?

Don't get me wrong: I think this and the money guaranteed by the UK government is great for the security of businesses and individuals. But how are people going to use it? I don't see many or any companies investing in new technology or launching new products/services with the market uncertainty and the inability to sell or promote stuff anyway.

And I don't see people consuming much beyond the essentials although perhaps spending more on "bunkering" luxuries like streaming services, chocolate and alcohol etc. But who is going to be buying a new house? Going on holiday? Splurging on a kayak?

If I was cleverer and had extra cash available I'd be looking to see where this money is heading. Obviously, it's largely going to help prop up share prices and various funds but understanding where that money is going to end up must be worth a fair bit.


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The new Coronavirus economy on 20:27 - Mar 26 with 2069 viewslegally_blue

That’s a very interesting point and it will be hard to predict how people will react. I know that a lot of investment funds have been hit with mass redemption requests as there was a flight to cash, but hopefully it doesn’t result in people just sitting on cash - the only way the economy can recover is to get everything moving again as quickly as possible
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The new Coronavirus economy on 20:54 - Mar 26 with 2016 viewsBanksterDebtSlave

It will be used for stock buy backs again and then associated bonuses...all paid for by the taxpayer while central banks try to create inflation.

Edit ....does the last sentence mean you want to know how to play the casino economy?
[Post edited 26 Mar 2020 20:56]

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The new Coronavirus economy on 20:56 - Mar 26 with 2009 viewsSteve_M

Jonathan Portes has started thinking about it, makes the point that much of Europe shuts down for four-six weeks each Summer and that is fine - but largely because we decide is fine:

https://www.theguardian.com/commentisfree/2020/mar/25/there-is-no-trade-off-betw

Doesn't address everything you raise.

Also if society was moving more towards an 'experience' model above' just buying 'stuff' then what effect does this have on that trend? Travel is mainly out for this year as a start...
[Post edited 27 Mar 2020 7:30]

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The new Coronavirus economy on 20:57 - Mar 26 with 2003 viewsGuthrum

Model? There isn't one.

We're in new territory, this has never happened to the global economy before. Massive debt (government and otherwise). Businesses fatally damaged. Possibly long-term changes of behaviour, e.g. on flying. More people working from home permanently.

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The new Coronavirus economy on 20:58 - Mar 26 with 1997 viewsGuthrum

The new Coronavirus economy on 20:56 - Mar 26 by Steve_M

Jonathan Portes has started thinking about it, makes the point that much of Europe shuts down for four-six weeks each Summer and that is fine - but largely because we decide is fine:

https://www.theguardian.com/commentisfree/2020/mar/25/there-is-no-trade-off-betw

Doesn't address everything you raise.

Also if society was moving more towards an 'experience' model above' just buying 'stuff' then what effect does this have on that trend? Travel is mainly out for this year as a start...
[Post edited 27 Mar 2020 7:30]


That is a pre-planned break, not a sudden truncation of business.

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The new Coronavirus economy on 21:04 - Mar 26 with 1988 viewsBloomBlue

On LBC a couple days ago they were talking about a number of professors across lots of Counties including UK, Germany, France and the US are saying Governments are wrong to put all these billions into fighting CV they should just let it take its course.

That's because with all the richest countries pumping it all this money, plus those same countries will suffer recession the only way of paying it back is massive austerity, Germany is already talking about austerity.

Their argument is CV will kills 1000s and while yes some younger people the vast majority will be old people. But the burden of paying back this massive borrowing all governments are doing will fall on youngsters and with the austerity that will be required it will kill 100,000s of youngsters.
Hence let CV take its course and dont borrow billions to pay for it and the overall death total will be lower.
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The new Coronavirus economy on 21:06 - Mar 26 with 1973 viewsDarth_Koont

The new Coronavirus economy on 20:57 - Mar 26 by Guthrum

Model? There isn't one.

We're in new territory, this has never happened to the global economy before. Massive debt (government and otherwise). Businesses fatally damaged. Possibly long-term changes of behaviour, e.g. on flying. More people working from home permanently.


Well exactly.

So where does the money go and how does the economy itself start moving? I buy the security aspect but don't see much confidence or even ability to actually spend it.

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The new Coronavirus economy on 21:23 - Mar 26 with 1924 viewsEdmundo

The new Coronavirus economy on 21:04 - Mar 26 by BloomBlue

On LBC a couple days ago they were talking about a number of professors across lots of Counties including UK, Germany, France and the US are saying Governments are wrong to put all these billions into fighting CV they should just let it take its course.

That's because with all the richest countries pumping it all this money, plus those same countries will suffer recession the only way of paying it back is massive austerity, Germany is already talking about austerity.

Their argument is CV will kills 1000s and while yes some younger people the vast majority will be old people. But the burden of paying back this massive borrowing all governments are doing will fall on youngsters and with the austerity that will be required it will kill 100,000s of youngsters.
Hence let CV take its course and dont borrow billions to pay for it and the overall death total will be lower.


The problem is, people don't like to see death as a rule. And the media are hell bent on focusing on the "death toll", like it's some kind of World Cup of disease.

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The new Coronavirus economy on 22:13 - Mar 26 with 1878 viewsGuthrum

The new Coronavirus economy on 21:06 - Mar 26 by Darth_Koont

Well exactly.

So where does the money go and how does the economy itself start moving? I buy the security aspect but don't see much confidence or even ability to actually spend it.


Most people have received about the same amount of income as usual, but a lot of it has not been made by business, just borrowed. There will be a lot of debt to follow (possibly major government defaults, down the line) but not much extra money. Unemployment will be a huge problem if there is no miraculous bounce-back.

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The new Coronavirus economy on 22:15 - Mar 26 with 1865 viewsvapour_trail

The new Coronavirus economy on 22:13 - Mar 26 by Guthrum

Most people have received about the same amount of income as usual, but a lot of it has not been made by business, just borrowed. There will be a lot of debt to follow (possibly major government defaults, down the line) but not much extra money. Unemployment will be a huge problem if there is no miraculous bounce-back.


Unfortunately, a second decade of austerity ow feels inevitable.

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The new Coronavirus economy on 22:25 - Mar 26 with 1846 viewsWicklowBlue

The new Coronavirus economy on 21:04 - Mar 26 by BloomBlue

On LBC a couple days ago they were talking about a number of professors across lots of Counties including UK, Germany, France and the US are saying Governments are wrong to put all these billions into fighting CV they should just let it take its course.

That's because with all the richest countries pumping it all this money, plus those same countries will suffer recession the only way of paying it back is massive austerity, Germany is already talking about austerity.

Their argument is CV will kills 1000s and while yes some younger people the vast majority will be old people. But the burden of paying back this massive borrowing all governments are doing will fall on youngsters and with the austerity that will be required it will kill 100,000s of youngsters.
Hence let CV take its course and dont borrow billions to pay for it and the overall death total will be lower.


Life is surely more important than money!

Over here the ESRI predict at least a 7% contraction this year and unemployment soaring to 18%.

http://www.rte.ie/news/business/2020/0326/1126492-esri-on-covid-19-impact/
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The new Coronavirus economy on 23:31 - Mar 26 with 1804 viewsvapour_trail

The new Coronavirus economy on 22:25 - Mar 26 by WicklowBlue

Life is surely more important than money!

Over here the ESRI predict at least a 7% contraction this year and unemployment soaring to 18%.

http://www.rte.ie/news/business/2020/0326/1126492-esri-on-covid-19-impact/


I think the arg

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The new Coronavirus economy on 07:33 - Mar 27 with 1709 viewsSteve_M

The new Coronavirus economy on 20:58 - Mar 26 by Guthrum

That is a pre-planned break, not a sudden truncation of business.


Yes, of course. But were this to be over in three months, or at least the peak had passed, then perhaps the economic hit would be more limited than people are expecting.

His point is more that economies do cope with big gaps in production within a year which is more a starting point for further thinking.

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The new Coronavirus economy on 08:43 - Mar 27 with 1678 viewsNo9

Once again a crisis shows the present system of markets / capital doesn't work.


BUT never mind it is all going to be over by easter
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The new Coronavirus economy on 10:08 - Mar 27 with 1641 viewslinhdi

The new Coronavirus economy on 08:43 - Mar 27 by No9

Once again a crisis shows the present system of markets / capital doesn't work.


BUT never mind it is all going to be over by easter


It just might be that an extended break from consumerism just might change behavioural patterns. That would be really bad news for some retailers, and perhaps some parts of the leisure industry. Fuelled by a significant drop in income for millions.

Or, there just might be an extended party once it's over, with all that spending we're not doing for a few months suddenly released into the economy.

More likely, a bit of both...
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The new Coronavirus economy on 12:52 - Mar 27 with 1605 viewshampstead_blue

It's an interesting point.

You could look at the pent-up demand for all manner of goods and services.
People want to enjoy discretionary spending so I expect there will be a huge rush of spending when we all get let out.

I'd say that we've stopped pretty much all discretionary spending. Even day-to-day has dramatically reduced. Our weekly petrol costs are quite high, that's gone. Gym membership and personal training, gone. Cleaner, gone.

I'm not sure it will change our behaviours in the long run as prudent financial planning has always leaned toward strong liquid reserves, even if that's a credit card you can use in case of emergency.

People have short memories on the whole so I'm not holding out for any fundamental changes in society.

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The new Coronavirus economy on 13:57 - Mar 27 with 1548 viewsNo9

The new Coronavirus economy on 10:08 - Mar 27 by linhdi

It just might be that an extended break from consumerism just might change behavioural patterns. That would be really bad news for some retailers, and perhaps some parts of the leisure industry. Fuelled by a significant drop in income for millions.

Or, there just might be an extended party once it's over, with all that spending we're not doing for a few months suddenly released into the economy.

More likely, a bit of both...


I agree a consumerism holiday is not a bad thing but there is a wider problem which is profiteering increasing prices and reduced goods (necessities) availability both cause inflation which will damage the less well off most.

Coupled with the increses in prices (already here) the drop in income will lead to greater levels of hardship & poverty

Does government just let everyone, who needs support, die ?
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