We’ve linked some other articles talking about the economic impacts of everything that’s going on further below in this article too.
If you’ve studied economic history, you knew the likelihood of a V-shaped recovery happening when this started in March was optimistic at best.
Now a few months later the hopes and plans of this from our leaders looks even more ridiculous.
Let’s do a quick rewind of world events before I talk about today.
In March and April 2020 China said it eradicated the coronavirus from the country.
Few around the world believed these claims…
Not just because the Chinese government has a history of lying or not “being as transparent” as other countries would like. But also, because the numbers of new reported cases didn’t make sense based on basic math and statistics.
This is being proved out now with the release of its economic numbers and stories of the economy coming out online. You can see some of these below.
You probably haven’t heard about this in the Mainstream Media… But there have been more city and province closures in China since April too.
On May 19th China shut down the 700,000-population city of Shulan in Northern China due to increased coronavirus activity.
And then on June 14th the Associated Press reported that the Chinese capital of Beijing and one of its largest food markets is locked down after a spike in cases in the city.
The Beijing Metro Area has an estimated population of 24 million people making it one of the largest cities in the world.
Officials shut the food market and parts of the city down due to a rapid increase in new coronavirus cases… Allegedly 49 new cases in the Beijing area alone.
In the Hebei province outside of Beijing 177 people were in treatment for the virus. While another 115 were in isolation after testing positive without showing symptoms.
I’m not picking on China here. I’m just using them as the first example because this is where the virus originated.
They were the first to shut down, the first to reopen, and the first to see new cases emerge to any large degree.
New cases in China is scary enough… But this is also happening worldwide whenever cities and countries open their economies and resume “normal” levels of activity.
• Japan instituted a country wide state of emergency from April 7th to May 31st after the country saw a spike in cases.
• And on June 1st South Korea kept 838 schools closed after planning to reopen all schools in the country on May 27th. This due to a spike in cases in the country.
And this isn’t just confined to Asia either.
In recent weeks new cases of the coronavirus exploded in Brazil, Russia, Peru, Chile, and India.
European countries are just now opening most of their countries to prepare for the Summer Travel Season, so we’ll have to wait 2 or 3 weeks to see how this goes.
But Germany is already seeing another spike in cases as of May 13th. And then another spike on June 15th.
And in the US cases are spiking nationwide as well.
On June 14th, The Washington Post reported that 21 states saw an increase in the average number of new coronavirus cases.
This due to the travel season starting in the US and the recent Memorial Day Holiday, the ongoing protests and riots, and people just wanting to get out of their houses more after being locked down most of the last 3 months.
Governor Cuomo of New York state is even threatening to close Manhattan and The Hamptons after seeing people flouting social distancing rules.
Tens of millions of people are already out of work in the US. And hundreds of millions are out of work worldwide.
In the coming days and weeks countries worldwide are going to begin reporting the worst economic data we’ve seen since The Great Depression.
And on top of all of this, after months of being locked down coronavirus cases are now spiking again as people go back outside.
It makes no sense. And while I’m not saying the market is 100% going to crash badly again anytime soon. No one knows this for sure.
I can say with certainty that the current huge run up in the stock market in the face of all this makes no economic sense.
To me this looks like a classic bear market trap.
This is when the market falls by a lot, then recovers and “tricks” people into the complacency that everything is okay… Only for the market to crash again when economic data realities kick in.
Historically when this happens, people who rush in to buy “cheap stocks” in these situations get crushed when the market turns against them again.
When this pandemic first started in March here in the US, people who’ve studied economics and financial history already knew the constant talk of a V-shaped recovery by the world’s leaders was unlikely.
Now, that sentiment looks like an absolute absurdity due horrible economic news, mass unemployment, and the new rise of coronavirus cases worldwide.
I don’t know what we’re in for during the coming months… But one thing I do know is it won’t be a V-shaped quick fall and then quick recovery back to normal.
We never had the virus under control… We just locked ourselves in our homes to avoid it. And now that we’re going back outside again, new cases are spiking.
This is no surprise to anyone who has studied economics or past pandemics to even a small degree.
There is one huge difference between now and March though… In March, the economy was doing great and unemployment was at an all-time low.