Many different political decisions made by countries and many unusual political steps set by governments. A lot of countries and their citizens wanted to go to Europe and wanted to draw European citizens as tourists to their own country, but now a lot of countries such as El Salvador, Turkey, Russia, Nigeria announce not to accept anyone from some or all European countries.
Also, many travellers now do not want to head to Europe or Asia because of fear of the virus.
Just one virus caused many different social and economical problems within two months (of course there were many different issues before the virus broke out but this virus triggered everything)
Normally back in the old days, South Korea had one of the strongest passports in the world which let Koreans enter almost every country on Earth. However, now Koreans cannot travel out of Korea since the number of Coronavirus patients rose significantly, Neither can Italians.
In general, the American government took pride in the American health care system, Trump even posted a map showing that the USA is the best-prepared country for an epidemic. Unfortunately within two weeks, we have seen that the Trump administration has no idea how to struggle with this virus, and hospitals in the United States do not have enough test kits. Namely, even though coronavirus is spreading out in the United States, Trump administration has not taken the plunge.
In Iran, the vice minister of health got infected right after saying that Coronavirus cannot have the power to infect Iranian people.
Long story short, the politicians unbelievably make a lot of stupid mistakes that help viruses scare people more than it could be. However, today I will not write about how dangerous this virus can be. I will write about what we will face in the future.
Since last January, Coronavirus affects not only People's health but also people's wallets. Within two months the cost of a virus for China is $ 200 billion. Airline companies so far have lost 5 billion dollars, and tourism firms have lost 15 billion dollars. The global economy has also lost 1 trillion dollars. In short, in a short time, the virus hit the global economy and many sectors.
Furthermore, lots of states stop the export of medical supplies, masks, and other needs. The alarm bells are ringing for the economy.
Stock markets all over the world are tumbling down sharply and investors storm into the precious metal market such as gold and silver.
As we can see on the graphs, VIX ( Volatility Index), also known as Fear Index, shows that investors see stock markets as uncertain and run to gold. This "Fear Index" now is the point of 41. The same index in 2008 at the beginning of the Global Crisis hit the point of 59. It is a good illustration that maybe we again are dragged into a mage economic crisis.
Oil price is also going down like greased lightning. Just yesterday (08 March 2020) went down by about 25%. Probably many oil depended countries will have a significant fiscal deficit this year. The problem is that they need money to supply medications and treatments to fight with the virus. Lebanon, for instance, today announced that Lebanon's government is to default on foreign payment for the first time in its history as the country struggles with a major financial crisis. This is a huge problem as the virus breaks out there.
Russia does not decrease the production of oil to want to hit American oil producers, likewise Saudi Arabia push down the oil prices by 8 dollars cheaper than Russia sells. So those two countries' war put the world's economy in an economic depression. Oil crisis or war will transfer the economic difficulties to another stage which could be that companies go bust.
Russia does not decrease the production of oil to want to hit American oil producers, likewise Saudi Arabia push down the oil prices by 8 dollars cheaper than Russia sells. So those two countries' war put the world's economy in an economic depression. Oil crisis or war will transfer the economic difficulties to another stage which could be that companies go bust.
Other problem is consumption level which is the backbone of economy. Many countries to stop spreading virus ordered a curfew, or put cities in quarantine. People become asocial individuals and be detached from life. Nobody wants to go out because of fear. Antisocial people also economically not preferable because capital economies need people to spend money in a cafe, pub, cinema, etc.
People now are willing to stay home to avoid the virus. Consumption level in the coming days will be deceasing which can calamitously hurt the firms.
Probably currencies will fall as a result of the uncertain future. Investors do not like to invest money in the currency market during uncertain situations. Many currencies will face the fluctuation and uncertain daily ups and downs. So currencies are not the best investment area for a while.
The factories should keep producing the stuff in order to keep the life going on, otherwise with economic crisis we will face the shortage of every goods.
The factories should keep producing the stuff in order to keep the life going on, otherwise with economic crisis we will face the shortage of every goods.
Long story short, 2020 may bring unforgettable economic crisis that human being has never experienced. ( I hope not)
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