The World Is Grinding To A Halt And That Is A Very Big Deal

Consider some of the economic and financial consequences of this black swan event

The coronaviris has affected the entire planet. Given that the economies and financial systems of so many countries are dependent on each other, you can bet the effects of this calamity will continue for months and years.

A black swan event in financial market terminology is a rare unforeseen occurrence that causes investors to sell and reduce exposure to risky investments. It could be different things, but most likely it is something big, like a plague, huge earthquake, or worldwide disease.

The coronaviris is clearly a black swan event. We had been in a very long bull market for stocks and now the coronaviris has struck. People have gotten nervous and scared, and that often leads to the selling of stocks and the purchase of bonds.

What is likely to happen going forward? Here are some ideas:

  • Unemployment increases
  • Businesses close
  • Property values go down
  • Asset prices decrease
  • Governments help out

What industries are affected the most?

  • Travel
  • Hotels and hospitality
  • Tourism
  • Restaurants
  • Sports
  • Entertainment
  • Large events with crowds

Europe is going to face huge challenges. Some countries there already had high unemployment rates. If tourism in Europe goes to zero and stays there for weeks or months, you’re going to see financial harm and job losses that are hard to comprehend.

Other parts of the world will face big problems, the scale of which are unimaginable. Consider families who rely on tourists for their income. The resulting income loss means they have less money to spend on food, rent, and other necessities. There will be a huge tidal wave of financial effects.

How bad will it get? I believe people will hunker down and focus on saving money and cutting expenses. That in turn will cause revenue to drop for businesses and companies, which means they will need to reduce staff, and so on.

What can one person do about it?

  • Be productive
  • Keep working
  • Stay positive
  • Reduce unnecessary expenses
  • Support your local stores
  • Be kind and friendly

The world is facing a crisis that is hard to comprehend at this point. I think there is a lot more to follow in the weeks and months ahead. We can and we will get through this together, one step at a time.

Written by

writer and novelist. traveler and adventurer. looking for fun in the sun. chasing the dream. can't stop the feeling that time is going faster.

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