New Rickards book!

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New Rickards book!

Post by vnatale » Wed Jan 13, 2021 12:07 pm

Missed it by a day. Came out yesterday.

Bought it a few minutes ago. Will start reading it tonight!

Vinny

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Re: New Rickards book!

Post by Hal » Wed Jan 13, 2021 2:55 pm

Awaiting your review :)
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Re: New Rickards book!

Post by boglerdude » Wed Jan 13, 2021 8:39 pm

I rely on vinny to watch cspan etc
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Re: New Rickards book!

Post by vnatale » Wed Jan 13, 2021 8:44 pm

boglerdude wrote:
Wed Jan 13, 2021 8:39 pm

I rely on vinny to watch cspan etc


I have it on now, with a repeat of this afternoon's speeches. In the next 15 minutes it will go off so I can read this book while listening to music.

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Re: New Rickards book!

Post by vnatale » Wed Jan 13, 2021 9:17 pm

I do LOVE his writings!

Below is what I highlighted from the Introduction. You will see that he says what many others here have contended.

Vinny

This book is about a virus that caused a global depression. More precisely, it’s about how our reaction to a virus caused a global depression. A virus can cause disease and pandemic, yet it cannot directly cause an economic collapse; that’s up to us.

We made many choices when the extent of the viral attack became clear. Those choices were informed and at times misinformed by science and economics. Since the virus was new and scientists were not in accord, choices offered by science were both muddled and contradictory. To say the economic choices were muddled and contradictory seems redundant. Still, scientists and economists acted mostly in good faith and always under extreme duress due to the suddenness and lethality of the disease. They did the best they could. It’s not clear another expert team would have done better under the circumstances.


Still, the suffering of virus victims and the caregivers’ sacrifice should not blind us to a different source of misery—the New Great Depression. Policy choices in the face of pandemic have caused the greatest economic collapse in U.S. history.


Comparisons to the 2008 global financial crisis, the 2000 dot-com collapse, and the 1998 financial panic miss the point. Those crises, while critical to those affected, were trivial compared with what’s upon us now. The first Great Depression, from 1929 to 1940, offers a better frame of reference, yet even that cataclysm does not capture the extent of what happened in 2020 and what is yet to come. The 89.2 percent stock market crash that occurred during the Great Depression played out in stages over four years (1929–32). The 60 million U.S. job losses in the New Great Depression have played out in just over four months, and more losses are coming.



What is a depression? Economists have no easier time answering that question than scientists who are asked if a virus is alive. At least scientists are still trying. Economists have given up on the idea of “depressions” and have banned the word from their lexicon. Such behavior is typical of economists, who bury their heads in the sand when facing a real-world problem. Still, depressions do exist; we’re in one now. And like viruses, they morph and evolve, ready to attack healthy economies the way a virus attacks a healthy cell. Both pandemics and depressions are rare. Finding economists with a working knowledge of depression dynamics is a singular challenge. The effects of depression can be devastating, even fatal. Just as scientists search for vaccines, economists search for policy solutions to remedy high unemployment, lost output, and collapsing world trade. Scientists don’t have all the answers at first, the view that a virus is a primitive life form from which other more complex forms of life evolved. Others believe that a virus is the result of devolution rather than evolution—that the virus had a predecessor, which was a higher form of life that simplified or devolved into what we see today. Another view is that viruses began as part of a living cell that separated and emerged with unique properties, yet not fully alive. Not knowing if a virus is even alive is just the beginning of humankind’s struggle with the microscopic foe.

What is known is that a virus is a master of replication. They do not do this on their own. Instead, viruses invade a living cell, take over the host cell’s energy and DNA, embed their own genes (coded in RNA, a less complicated form of DNA), and then, in effect, order the host cell to replicate the virus by the thousands. In time, the cell wall bursts, the virus copies are released, and the process continues, now on a far larger scale. A viral swarm has begun.

A virus is no more than an egg-shaped sheath with genetic code inside. The key to replication is what’s on the surface of the sheath. The influenza virus has two types of protuberance. The first is a spear made of hemagglutinin (“H”). The second is shaped like a prickly shrub and made of neuraminidase (“N”). The hemagglutinin spears bind to the target cell, “like grappling hooks thrown by pirates onto a vessel,” in Barry’s words, and begin the genetic invasion. The neuraminidase acts like a battering ram that breaks down sialic acid on the target cell’s surface. When the replicated viruses burst from the target cell, they would normally stick to the acid coating. Due to neuraminidase, the coating is destroyed and the new viruses are free to attack other healthy cells.

The H and N abbreviations are familiar to even casual observers of influenza outbreaks. Scientists have identified eighteen elemental shapes for hemagglutinin and nine for neuraminidase. The 1918 Spanish flu was type H1N1. The 1968 Hong Kong flu was type H3N2, still in circulation today. The precise HN structure of SARS-CoV-2 is unknown and is the object of intense research about the structure and behavior of the virus. This research is hampered by apparent rapid mutation of the virus even at this early stage of the pandemic.

What is a depression? Economists have no easier time answering that question than scientists who are asked if a virus is alive. At least scientists are still trying. Economists have given up on the idea of “depressions” and have banned the word from their lexicon. Such behavior is typical of economists, who bury their heads in the sand when facing a real-world problem. Still, depressions do exist; we’re in one now. And like viruses, they morph and evolve, ready to attack healthy economies the way a virus attacks a healthy cell. Both pandemics and depressions are rare. Finding economists with a working knowledge of depression dynamics is a singular challenge. The effects of depression can be devastating, even fatal. Just as scientists search for vaccines, economists search for policy solutions to remedy high unemployment, lost output, and collapsing world trade. Scientists don’t have all the answers at first, yet they have sound methods for finding answers. Economists don’t. That’s why the New Great Depression will last longer than the pandemic and have more persistent adverse effects.



Viruses are enigmatic yet well-studied by science, while depressions are real yet ignored by economists. In this book, we explore how the viral enigma emerged and how our response caused a global depression. We cannot blame the virus for the depression; we can only blame ourselves for our response to the virus. That response was the depression’s real cause. The consequences will linger long after the virus is contained.

A word on science. Some epidemiologists and immunologists complain that economic analysts should keep out of medicine. The science of viruses, influenza, vaccines, and pandemics is highly technical, takes years of specialized training to master, and requires clinical and laboratory experience to practice expertly. Of course.

Yet immunologists such as Dr. Anthony Fauci, an adviser to President Trump, showed no such restraint when it came to the practice of economic public policy. They claimed that they only made evidence-based recommendations and left economic policy to others. That’s untrue. When immunologists demanded the world’s largest economy be locked down to mitigate the spread of the SARS-CoV-2 virus, they were implementing the most profound economic policy change in history. You can’t have it both ways. Immunologists cannot fundamentally alter the U.S. and global economies, perhaps for decades, while insisting that economic policy makers keep out of immunology.

growth. If an economy is capable of 3 percent growth yet grows for an extended period at 2 percent, it’s experiencing depressed growth. Growth can occur during a depression, just as output declines can happen during an expansion. The key lies not in quarterly performance but in the long-term trend relative to potential.

John Maynard Keynes offered the best definition of depression: “a chronic condition of sub-normal activity for a considerable period without any marked tendency either towards recovery or towards complete collapse.”

Based on history and Keynes’s practical definition, we are now in a new depression that is more far-reaching than a mere technical recession. Depressions are as much psychological as numeric. Output and employment figures matter, but behavioral changes matter more. As growth returns, gains will start from such a depressed plane that the prepandemic output level will not be achieved for years. Unemployment will start to decline, yet from such high levels that hard times will persist for millions of workers for years to come. Numbers aside, behavioral changes will be profound and intergenerational. People will spend less and save more despite White House hectoring to borrow and spend “like the good old days.” Those days are over.

Viruses are enigmatic yet well-studied by science, while depressions are real yet ignored by economists. In this book, we explore how the viral enigma emerged and how our response caused a global depression. We cannot blame the virus for the depression; we can only blame ourselves for our response to the virus. That response was the depression’s real cause. The consequences will linger long after the virus is contained.

A word on science. Some epidemiologists and immunologists complain that economic analysts should keep out of medicine. The science of viruses, influenza, vaccines, and pandemics is highly technical, takes years of specialized training to master, and requires clinical and laboratory experience to practice expertly. Of course.

Yet immunologists such as Dr. Anthony Fauci, an adviser to President Trump, showed no such restraint when it came to the practice of economic public policy. They claimed that they only made evidence-based recommendations and left economic policy to others. That’s untrue. When immunologists demanded the world’s largest economy be locked down to mitigate the spread of the SARS-CoV-2 virus, they were implementing the most profound economic policy change in history. You can’t have it both ways. Immunologists cannot fundamentally alter the U.S. and global economies, perhaps for decades, while insisting that economic policy makers keep out of immunology.

In the fullness of time, the 2020 lockdown of the U.S. economy will be viewed as the greatest policy blunder ever. Lost wealth and income will be measured in trillions of dollars. Any gain in lives saved or damage avoided was inapposite, since equally effective policy choices were available but untried. There’s no evidence that epidemiologists considered lives lost to drugs, alcohol, suicide, and despair when they pursued policies that pushed 60 million Americans out of jobs.

From 1968 to 1969, the H3N2 strain of influenza A virus ravaged the world. Known then as the Hong Kong flu, it killed over 1 million people worldwide and over 100,000 Americans. It was the third-worst influenza pandemic on record, surpassed in fatalities only by the Asian flu (1957–58) and the Spanish flu (1918–20). Prominent fatalities included former CIA director Allen Dulles and Hollywood legend Tallulah Bankhead. President Lyndon Johnson was infected with the flu and survived. An Apollo astronaut, Frank Borman, became ill with the flu in outer space. It was a fierce pandemic with a tragic loss of life, yet there was no lockdown. Life in America continued as before. Scientists worked on a vaccine (which was finalized in August 1969), and the public relied on the scientists. Otherwise, life went on. Woodstock occurred during this pandemic. There was no social distancing at Woodstock.

This is not to say mitigation measures should not be used today. They should. Still, immunologists who want to shut down a $22 trillion economy should expect to hear from analysts who take a different view. I’ve read scores of peer-reviewed papers on epidemiology and economics as research for this book. Both fields are accessible to the educated layperson willing to make the effort to understand the science. I’m not an epidemiologist, but I’m not intimidated by science either. Perhaps two degrees from Johns Hopkins University immunized me from academic angst where natural science is concerned. Of course, I’m perfectly at home in the worlds of public policy and economic analysis.
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Re: New Rickards book!

Post by vnatale » Wed Jan 13, 2021 10:01 pm

The world is waiting for a Wuhan-born virus to run its course. That may never happen.



As explosive as the growth of new cases in China was, it is almost certainly an undercount and an official deception. The real spread in Wuhan and China was far worse. A study by the American Enterprise Institute using reliable travel data and reasonable assumptions on the infection rate estimates the number of COVID-19 cases in China at 2.9 million. Perhaps 200,000 Chinese died. Ample anecdotal and empirical evidence supports these estimates.

Eyewitness accounts report that in a two-week period from March 23 to April 4, 2020, over five hundred urns of victim ashes were delivered to families in Wuhan every day. That data suggests 7,000 dead in Wuhan alone in a fairly brief period, compared with China’s official report of just over 4,700 dead in the entire country from November 2019 to October 2020. Both eyewitnesses and U.S. intelligence sources report that incinerators in Wuhan were in use twenty-four hours a day in March and April and as many as 45,500 corpses may have been cremated. The truth may never be known, because China has no interest in revealing the truth and every interest in hiding it from the world.



Italy was a warning to the rest of the world in part because earlier Chinese data was fabricated and could not be relied upon by policy makers as a guide. In contrast, Italian data was reliable and told a horrifying story of contagion and exponential spread. This was why other developed economies were late in implementing protective measures. Chinese data, although flawed, suggested containment was possible. The Italian data showed the epidemic was not contained in China and would spread explosively in other high-density environments. It was the unfolding disaster in Italy that finally put the United States and Europe on high alert. Still, it was too late. By early March, the virus had gone global and the explosion in caseloads hit Spain, France, Germany, and the United States in rapid succession. March 15, 2020, marks the date when the global caseload chart went vertical, forming a classic “hockey stick” shape. On March 15, the global caseload was 167,000. By March 31, just over two weeks later, the figure was 858,000. By October 1, 2020, there were over 32 million confirmed cases. Individual cities and countries were trying to flatten their curves. The global curve had not flattened at all.


Regardless of the pattern that emerges, all three scenarios can be mitigated by commonsense solutions such as social distancing, face masks, frequent hand washing, limiting crowd sizes, and voluntary self-quarantine by those most vulnerable, including those over sixty-five years old and those with respiratory problems, diabetes, or compromised immune systems. Neither scenario 1 nor scenario 3 would require extreme lockdown measures of the kind the U.S. economy (and economies abroad) have experienced over the course of March–October 2020.

The danger is that we experience scenario 2, in which our struggle in the first half of 2020 is just a glimpse of a greater horror to come. In that case, the return of extreme lockdown measures of the kind that were recently lifted should be expected.



The rise in global infected was relentless. Over thirty-two million confirmed cases and over 1,000,000 deaths were reported worldwide by October 1, 2020. By far the leader in global fatalities was the United States, with over 200,000 dead by early October. Over 53,000 died in New York, New Jersey, and Connecticut alone, over twenty-five percent of the United States total. What started in Wuhan had landed like a viral H-bomb in Times Square and devastated surrounding communities. It was hard to meet anyone in New York who did not know someone who had died or suffered badly in the viral storm.

Going forward, the best case is that we’ll see regional peaks in a single-peak pattern, followed by progressively smaller waves until the disease mutates to a manageable form. The worst case is that the October 2020 peak is followed in six months by a second wave of greater virulence, producing more violent deaths on a far greater scale. History and science suggest that the worst case cannot be dismissed; it may be the most likely.


Did the virus originally spring from a laboratory or a wet market? That question is an enduring mystery of the pandemic with immense implications for U.S.-China relations and, by extension, the global economy.

Responsibility for the initial handling of an outbreak rests with the leadership of the country where the outbreak originates. The best course is to act quickly, report honestly, and invite teams of international scientists to assist in containing the spread and treating the victims. Viral investigators can identify and isolate the pathogen. Research on vaccines and treatments can begin immediately. Every minute counts. This approach invites international team science in the best sense. The United States and other nations and international organizations, including the Red Cross and Red Crescent societies, were ready and willing to assist the victims in China and stop the spread of SARS-CoV-2.

China did not make use of this assistance. Its leaders were at first in denial, both at the provincial government level and within the Communist Party leadership. When they did react, in late December 2019, they took steps to cover up the disease.



Communist China’s chairman Xi did order Wuhan to take drastic measures on January 7 and locked down the city on January 23. By then it was too late. Millions of travelers had left China since the November 2019 outbreak and spread the disease to Seattle, Milan, and other cities around the world. The Chinese epidemic was now a pandemic. Scientists estimate that 95 percent of global infections would have been prevented if China had not engaged in its cover-up and had reached out to other nations for expert assistance.

China enlisted the help of the UN’s World Health Organization (WHO) to implement its cover-up. The WHO is headed by Director-General Tedros Adhanom Ghebreyesus, who was elected in May 2017 with strong political and financial support from Communist China and Tedros’s comrades-in-arms from Ethiopia’s revolutionary Tigray People’s Liberation Front. Tedros repaid his benefactors by spreading lies about the virus using his WHO platform.

On January 14, 2020, WHO issued an official tweet that said, “Preliminary investigations conducted by the Chinese authorities have found no clear evidence of human-to-human transmission of the novel #coronavirus (2019-nCoV) identified in #Wuhan, #China.” The tweet was a lie. China had been fighting the disease for months and saw evidence of human-to-human transmission in thousands of cases. There was no evidence to the contrary. The WHO simply parroted the Chinese party line.

On January 30, 2020, the WHO called the outbreak a “public health emergency” but refused to use the word “pandemic,” even though the disease had already spread to eighteen countries besides China at the time. The omission of the word “pandemic” was another WHO deception, since the global spread of the disease had already happened, and the pandemic’s path was clear based on China’s own experience. The WHO was little more than a Chinese propaganda channel.



China’s actions in suppressing the truth, using the WHO to promote its lies internationally, and expelling independent journalists are all consistent with the actions of someone with something to hide. What was China hiding?

What China wanted to hide was not the disease itself; that was impossible. China was hiding the source of the disease. This was an effort to deflect responsibility and neutralize trillions of dollars of damage claims. China needed to make the viral spread appear natural and unintended. China went further, using its new “wolf warrior” diplomacy, and blamed the United States for releasing the virus. Above all, China’s goal was to impede an inquiry into the real source of the virus. As long as there was no international investigation of the true source, China was free to propagate whatever version it liked.

There are two principal theories for the source of the virus at the time of its transfer to humans. The first is the “wet market” theory. The second is the “laboratory” theory. The difference matters greatly for the future of U.S.-China relations. The stakes for global commerce if communication between the world’s two largest economies breaks down could not be greater. These two virus-origination theories can be explored with available sources. This is a mystery that can be solved.


In sum, we know the Wuhan Institute of Virology possesses live bat coronaviruses, conducted risky experiments on bat-to-human transmission, and has deficient safety procedures.

The wet-market theory is anecdotal and cannot be proved or disproved without more investigation by virologists. China’s government has prohibited investigation by anyone except its own approved scientists. China caused the disappearance of individuals who dissented from the wet-market narrative and erased the social media posts of others. China lied repeatedly about the spread of the disease and the number of cases and fatalities. No investigation produced by Chinese officials alone can be relied on because of this documented pattern of cover-up and deception.



The laboratory theory has also come under attack. One article claims to show that SARS-CoV-2 could not have been bioengineered in a laboratory because the genetic data for the virus shows no sign of the use of reverse genetic systems that are a hallmark of genetic manipulation. Yet informed parties have not claimed the virus was bioengineered, only that it leaked from a laboratory through negligence. Most virology labs have large numbers of caged animals for experimental purposes. These animals may have had SARS-CoV-2 in a natural form and passed the virus to humans through blood, feces, or contact with other bodily fluids. Saying the virus was not engineered is not the same as saying it did not come from a lab. The widely cited article proves nothing with regard to the source of the virus. The study was partially funded by the Chinese government.

A more recent study (still pending peer review as of this writing) from Flinders University professor Nikolai Petrovsky, a prominent virologist, suggests that SARS-CoV-2 may be the result of a cell-culture experiment in a laboratory.



The most rigorously researched claim that the virus emerged from the Wuhan Institute laboratory and was bioengineered came from Chinese virologist Dr. Li-Meng Yan of the University of Hong Kong Medical Centre School of Public Health, which includes a reference laboratory for the World Health Organization.




There is clear consensus that the COVID-19 outbreak began in Wuhan in late 2019. There is also consensus that the SARS-CoV-2 virus was not bioengineered (with some opposing views). The consensus view is that the virus first existed in animals and infected humans through either zoonotic transfer or a petri dish. There is no consensus on whether that transfer took place by accident in a wet market or by accident in a laboratory, possibly the Wuhan Institute of Virology. There is clear evidence that the Wuhan Institute has live bat coronavirus strains today and has conducted risky experiments involving the possibility of transfer to humans in the past. There is also clear evidence that the earliest cases of COVID-19 in China had not visited the Huanan Seafood Market in Wuhan (the government’s claimed wet market).


, the evidence points strongly to a conclusion that the lethal virus leaked from the Wuhan Institute of Virology. We may never know for certain, unless secret Chinese archives are released in the decades to come, perhaps after a regime change.

Independent of whether the virus came from a wet market or a laboratory, China cannot disclaim responsibility for the economic damage caused and lives lost in the resulting global pandemic. Chinese involvement in the cover-up would constitute criminal culpability even if the virus came from the wet market. If the virus came from a lab, Chinese involvement in the cover-up constitutes a crime against humanity.
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Re: New Rickards book!

Post by vnatale » Wed Jan 13, 2021 10:49 pm

Worldwide, the Spanish flu carried off 40 million people, or two percent of humanity, equivalent to more than 150 million people today. . . . So why did this ferocious pandemic fail to wreck the economy? The answer is deceptively simple: for the most part, whether by necessity or choice, people barreled through.

—Walter Scheidel, Foreign Affairs (May 28, 2020)



Once the virus spread widely in the United States, an economic lockdown was imposed. Was a lockdown necessary given the behavior of the virus? The short answer is no, it wasn’t.

The lockdown of the U.S. economy and the end of social intercourse beginning in stages in March 2020 will be viewed as one of the great blunders in history. The lockdown was unnecessary, ineffective, and based on both official deception and bad science. The costs were not considered. Better alternatives were ignored. It was mostly unconstitutional. The American people were treated like not-very-bright children. The lockdown represented rule by experts operating outside their areas of expertise who were revealed to be not that expert even within their fields. Above all, it represented a failure of leadership, as politicians hid behind bureaucrats instead of widening the circle of cognitive diversity and leading from the front.


Some orders were fatal. On March 25, 2020, New York governor Andrew Cuomo issued an order to nursing home (NH) administrators that stated, “NHs must comply with the expedited receipt of residents returning from hospitals to NHs. . . .


This patchwork approach to closing and then reopening the economy as a form of disease control points to the first objection—it’s unnecessary and ineffective. Lockdowns don’t work.


There were ample alternatives to a total lockdown of the economy and social life that could have been implemented. There’s nothing wrong with voluntary social distancing, hand washing, and proper masks (most masks don’t work for their intended purpose or are worn incorrectly; some can work to prevent viral spread by those already infected who exhibit coughing and sneezing)


This brings us to the real reason for the lockdown, and the motivation for official fearmongering. The lockdown was never intended primarily to halt the spread of the virus. That’s impossible short of martial law and involuntary house arrest of the entire population. In fact, the spread of the virus is desirable in some ways because the fatality rate is quite low and herd immunity (large numbers of survivors with antibodies and immunity) is the best way to stop the pandemic, at least for now. The reason for the lockdown was primarily to “flatten the curve,” in the words of Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases.


What was not clearly explained (except in scientific journals) was that total infections and deaths would be about the same over time with or without the lockdown. Until a vaccine is created the virus will spread. Flattening the curve means elongating the curve. The peak load is lower, but the duration is longer. Total cases and fatalities are defined by the total area under the curve, not by the height of the curve at a particular point. A lockdown that flattens the curve does reduce peak patient load on the health-care system, yet it will not reduce total infections and fatalities in the long run. In fact, the lockdown may increase fatalities by delaying herd immunity, which is the only source of immunization and reduced exposure in the absence of a vaccine.

This real rationale of reducing the peak load is revealed in the medical literature. Dr. Michael Mina, associate medical director of clinical microbiology at Boston’s Brigham and Women’s Hospital, said, “I think the whole notion of flattening the curve is to slow things down so that this doesn’t hit us like a brick wall. It’s really all borne out of the risk of our health care infrastructure pulling apart at the seams if the virus spreads too quickly and too many people start showing up at the emergency room at any given time.”

Reducing the peak load on an overburdened health-care system is a legitimate policy goal. Some victims will die if they cannot receive prompt medical care. Still, there were solutions to this problem other than destroying the U.S. economy. Lockdowns could have been limited by location and time to those areas most likely to be overwhelmed. Care facilities could have been surged in the form of hospital ships and temporary hospitals (as was done in New York City and Los Angeles). Doctors and nurses could have been shifted from low-risk areas to areas of greater need (a common practice during the 1918 Spanish flu). An extreme nationwide lockdown was not needed and did not help.

Even if the case for a broader lockdown was stronger because of the peak load problem, why was this not explained clearly to the American people? Experts and politicians hid behind their flattening charts without making it clear that they were aiming for timing differences, not a long-term reduction in cases or fatalities. Fear was their most effective weapon. Trust was the first victim.


Another rationale for the lockdown was that it would buy time to create a vaccine. The costs of shutting down the economy would be offset by the lives saved once a vaccine was ready for mass inoculations. This would render the virus almost harmless, end the pandemic, and allow for a relatively risk-free reopening of all facets of the economy.

There’s only one problem with this vaccine rationale. An effective vaccine is highly unlikely to appear.




It is true that many fatalities from COVID-19 are due to influenza or pneumonia. A new vaccine for either disease would help reduce fatalities from COVID-19. Any one of a number of new drugs under development that reduce discomfiture, improve breathing, or treat severe symptoms are valuable and will make the disease more manageable. Hopefully, those drugs will work as expected. Yet they are not cures. HIV-AIDS is an apt comparison. There are drugs that, when taken in combination, reduce the side effects of AIDS, mitigate symptoms, and allow sufferers to live long and relatively normal lives, provided the drug regimens are followed. That’s a blessing. Yet there is no cure for AIDS.




The implication of these studies is that even if a vaccine is developed, it may be of limited effectiveness if any antibodies produced disappear within weeks. The research should be continued and supported by all means. Yet buying time for research was never a good reason to destroy the economy.

Perhaps the greatest fault of the experts who pushed the lockdown is their utter failure to consider the costs. It would be one thing if the lockdown were free or involved relatively minor inconvenience. In that case, even small gains relative to expectations might have been worth the cost. But lockdowns are not free.

The destruction of over $4 trillion in asset value and the loss of $2 trillion in economic output was the cost of the lockdown. Perhaps epidemiologists and virologists are so embedded in the world of science that they have no familiarity with the real world of economics. If so, it was the obligation of political leaders to take charge and balance competing considerations. The doctors mostly exceeded their authority and the politicians failed to stop them.

Economics aside, there are a host of other costs that argue against a lockdown. The first is immunity loss. While we were all working from home (if we could) to avoid SARS-CoV-2, we were also evading a long list of other viruses and bacteria that we routinely encounter. Those encounters help us to maintain immunities. By staying in place, our immune systems have now weakened. As we venture out again, those viruses and bacteria will be waiting for us. Many will sicken and die because we have squandered our immunities.

The lockdown was implemented to save lives from COVID-19. That’s possible in the short run and doubtful in the long run. Yet how many died to save lives?


What about the social costs of the lockdown?


Estimates for additional deaths from other drug use, alcohol use, suicide, and domestic violence all attributable to the deleterious effects of the lockdown suggest that perhaps 50,000 or more deaths will result from all causes (drugs, alcohol, suicide, domestic violence) as a direct consequence of the lockdown.


Lockdown costs don’t stop with the trillions of dollars of lost wealth and tens of thousands of lockdown-related deaths. Many have died from heart attacks and cancer by deferring needed medical procedures for fear of contracting COVID-19 in hospitals. There are deleterious mental and physical health outcomes from loneliness, isolation, and despair. Educational progress, especially among the young, was set back. Communities were being destroyed. Entrepreneurs were arrested for cutting hair or opening gyms. Constitutional rights to the free exercise of religion and to life and liberty were denied without due process of law. Petty bureaucrats assumed dictatorial power over people’s lives at the federal, state, and local levels. And for what? This destruction of wealth, deprivation of rights, and degradation of communities have been supported by epidemiologists and virologists who know little of law, economics, or sociology and who were empowered by panicked politicians afraid to lead.



Policy makers calculate trade-offs between potential death and safety and efficiency every day. Lowering the speed limit to forty miles per hour would save lives, but we don’t do that because it’s costly and inefficient. If you’re really concerned about it, you don’t have to drive. Plant-safety rules are designed to protect workers, yet extremes are avoided because the work must go on. Workers receive training and are informed of the risks. If you find the risks unacceptable, you’re free to work elsewhere. The point is that these trade-offs are made continually both from a policy perspective and through individual choices. Krugman’s top-down, doctrinaire approach is typical of academia and shines a light on bureaucracy’s tendency toward totalitarian solutions. Reopening the economy will cost some lives and save others. Individuals may choose to remain home, and some should. That’s what liberty means.

Finally, what was the scientific basis for the lockdown in the first place? What was the origin of the lockdown plan that carried huge costs and produced so little apparent benefit?



What the CDC offered the country was a return to the Middle Ages.

The original sin in this entire policy sequence is that Robert Glass, coauthor of the 2006 paper, was not expert in disease.


The paper, blueprint, and update include headings such as “Behavioral Rules” and “Community Mitigation Interventions.” The 2017 final plan’s checklists include recommendations for “Temporarily closing schools,” “Modifying, postponing, or canceling large public events,” and “Creating physical distance between people.” The entire lockdown scenario was based on specifications worked out through the Bush, Obama, and Trump administrations based on a paper produced by a scientist who knew nothing about disease, behavioral psychology, or economics. This was bureaucracy run amok. And it became our reality, costing lives and destroying trillions of dollars of wealth.


At the same time that nonepidemiologists and bureaucrats were going full speed down the lockdown route, serious virologists and epidemiologists were warning that lockdowns don’t work. They were right. Henderson and his coauthors supported commonsense measures such as self-quarantine, hand washing, protective gear, and respiratory hygiene. They warned that extreme measures such as a national lockdown don’t work. Their conclusions were ignored by the CDC and President Trump’s Coronavirus Task Force. The American people paid the price.

The best explanation of the dynamics of a lockdown comes from author Laura Spinney in her history of the Spanish flu, Pale Rider. Spinney’s point is not that lockdowns can’t work; it’s that they don’t work because of coercion and mistrust. She writes:


Spinney wrote this in 2017, before COVID-19. She based it on the lessons of 1918. She recommended voluntarism, individual choice, and avoidance of police powers. She emphasized straight talk and trust. In 2020 leaders used mandatory, not voluntary rules. Police engaged in heavy-handed arrests and roadblocks. Official information gave false reassurance and ignored the dangers. Trust was thin at the beginning of the pandemic and nonexistent at the end. Official actions ignored the lessons of history and the counsel of common sense. The lockdown failure should have come as no surprise.

In the end, did the lockdown save lives? Yes. It probably cost more lives than it saved, yet it did save lives. Martial law would have saved more lives, at least in the short run. And it would have destroyed the country.

Counting lives is not the only test. Lives could have been saved with far less intrusive measures. The government’s lockdown plan left no room for voluntary action and common sense. It took no account of exogenous costs, including deaths of despair, reduced immunities, and trillions of dollars in lost wealth and lost output that could have been put to life-saving ends. Dramatic evidence that lockdowns don’t work emerged on October 2, 2020, when the White House announced that both President Trump and First Lady Melania Trump tested positive for the virus. The virus goes its way with or without a lockdown. The lockdown was unnecessary and ineffective. It was the ultimate failure of elite expertise. Alternatives were available. The lockdown was a world-historic blunder.
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Re: New Rickards book!

Post by vnatale » Wed Jan 13, 2021 11:15 pm

The New Great Depression dates from February 24, 2020. That’s the day the market broke sharply lower, and it did not look back until hitting bottom on March 23, 2020. That completed a precipitous 36 percent decline in the Dow Jones Industrial Average. February 24 was not the all-time high; that happened a few days earlier. And the decline to the March 23 low was not a straight line; there were some up days along the way.





Wall Street cheerleaders appearing on financial media were quick to point out that this 37 percent crash paled in comparison with the 89.2 percent crash in the Dow during the Great Depression. This statistic conveniently ignores the fact that the 89.2 percent crash took three years (1929­32). The Dow fell 17.2 percent in 1929, 33.8 percent in 1930, 52.7 percent in 1931, and 22.6 percent in 1932. The 37 percent COVID-19 crash didn’t take three years; it took less than six weeks. And there was no assurance that there was not worse yet to come.



These twenty-first-century contrivances are not sustainable. Passive investing and indexing run out of steam when there are no more active investors to engage in price discovery. Stock buybacks dry up when leverage is not available and corporate cash flows erode. Robots will be the only buyers ahead of a fall when real money moves to the sidelines. The coding crowd can move on to other pursuits. The Fed will find that money printing is not stimulus when velocity is crashing for psychological reasons that the Fed scarcely comprehends. The game is up. All that is left are the larger forces of pandemic, unemployment, and fear for the future.



Otherwise, they’ll work from home. That’s fine for employers. What about the empty office space; landlords’ rent; laid-off cleaning staff; lost sales at food trucks, street vendors, and restaurants; half-empty trains and buses; and lunch-hour shopping? That’s all gone, or reduced by perhaps 80 percent. Life will go on, yet ancillary jobs and output will not. This is the difference between depressions and recessions. In depressions, things don’t get back to normal because there is no normal anymore.



Outside certain localities for brief periods following natural disasters or catastrophes like the 9/11 attacks or the Civil War, this has never happened in U.S. history. There were business failures during the first Great Depression, yet no across-the-board lockdown. There was no widespread business lockdown during the 1918 Spanish flu pandemic (some large gatherings such as sporting events were banned in certain cities). An estimated 50 million to 100 million people died during the Spanish flu, yet the global economy continued and the postpandemic business expansion was strong in most developed economies. What has happened to the U.S. economy because of COVID-19 is unheard of.



We are witnessing the widespread collapse of world trade. Contracting world trade measured by global exports (rather than national surpluses or deficits) was a defining condition of the first Great Depression. It’s happening again in the New Great Depression.




Second quarter U.S. GDP reported on July 30, 2020, was a disaster: the worst recorded economic performance in U.S. history. Real GDP fell 32.9 percent on an annualized basis; on a standalone basis (not annualized), GDP fell 9.5 percent, also the worst on record. Applying that rate of decline for a single quarter to a $22 trillion economy yields over $2.1 trillion in lost output in the second quarter. That does not compare to 2008­9. That does not compare to 1929­33. This fall was far worse. It’s the largest amount of lost output in a single quarter in the history of the United States. It amounts to $6,365 of lost income per person for every man, woman, and child in the United States. It comes to over $25,000 of lost income for every family of four. There has never been anything like it.


Buried in the second quarter GDP report was another sobering statistic: the inflation adjustment was negative 2.1 percent, which means deflation has arrived. Nominal GDP was actually worse than real GDP; the real number got a lift from the deflation. This means debtors, beginning with the United States itself, fared even worse than the economy because deflation increases the real value of debt. Persistent deflation points in the direction of default.





That’s $3,230 of lost income per person for every man, woman, and child in the European Union, or $12,900 of lost income for a family of four. This is comparable to the destruction at the end of World War II.



These forecasts are completely at odds with the “pent-up demand,” fast-growth narrative emanating from the White House. The IMF forecasts are likely far more accurate than those coming from the White House and are consistent with analyses from other expert sources.




Wall Street pundits point to the stock market as proof that the economy is bouncing back sharply and a strong recovery is right around the corner. The stock market did recover almost all of its pandemic-related losses with a strong performance from late April through early September 2020. Yet this says nothing about an economic recovery. The stock market is divorced from the real economy at this stage. Price discovery that does take place is conducted by robots programmed to “buy the dips,” chase headlines, and reinforce any form of momentum. The stock indices are dominated by a handful of companies that have been relatively immune to the hardship that is facing most individuals and firms. The April to September 2020 stock market speaks to the prospects for technology and finance, at least in the short run, yet says nothing about unemployment, growth, collapsing government cash flows, and the way forward.

The New Great Depression is here. The data tells the story. The stock market does not agree; it will eventually. The real story is told by the depression’s impact on people’s lives.
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Re: New Rickards book!

Post by vnatale » Wed Jan 13, 2021 11:42 pm

Americans may or may not be ready for the second wave of SARS-CoV-2, but they are certainly not ready for a second wave of layoffs and unemployment. It’s coming.

The pandemic-caused depression led to a layoff wave unprecedented in U.S. history. As remarkable as the number of layoffs was the speed with which they occurred. Unemployment in 2020 reached depression levels in three months, compared with three years during the first Great Depression. As bad as that was, some analysts were quickly relieved. At least the worst was over and the U.S. could look forward to recovering those lost jobs and getting to more typical levels of unemployment, if not the extraordinarily low levels of the prepandemic years. Yet the best evidence points to the opposite conclusion.

Unemployment reached 13.3 percent on May 31, 2020, and then fell to 7.9 percent by September 30, 2020. There’s no reason to believe the unemployment rate will decline sharply from that level or get anywhere near full employment for years. There are two reasons for this. The first is that the economy was weak before the pandemic. White House claims of “the greatest economy in history” were true only if you counted nominal GDP, in which case that claim is almost always true—and meaningless. What matters, and what Americans care about, is real growth, because that’s how jobs are created, businesses grow, and innovation takes place. Annual growth during the last expansion (2009–19) averaged 2.2 percent, the weakest expansion in U.S. history. Most annual growth figures were very close to that average, with no years showing even 3 percent growth. Importantly, there was no material difference between growth in the Trump years of the expansion (2017–19) and in the Obama years (2009–16). This 2.2 percent growth compares with 3.2 percent growth for the average of all expansions since 1980. In the 1950s and 1960s, the average annual growth rate was above 4 percent.

The U.S. economy was weak before the pandemic. Many businesses were barely getting by; many more were contemplating bankruptcy. The pandemic was a perfect opportunity for weak businesses to conduct mass layoffs, file for bankruptcy, close locations, or close their doors completely. The first wave of layoffs (March–June 2020) was hurried. The second wave of layoffs (from October 2020 through 2021) will be more studied.



Americans may or may not be ready for the second wave of SARS-CoV-2, but they are certainly not ready for a second wave of layoffs and unemployment. It’s coming.

The pandemic-caused depression led to a layoff wave unprecedented in U.S. history. As remarkable as the number of layoffs was the speed with which they occurred. Unemployment in 2020 reached depression levels in three months, compared with three years during the first Great Depression. As bad as that was, some analysts were quickly relieved. At least the worst was over and the U.S. could look forward to recovering those lost jobs and getting to more typical levels of unemployment, if not the extraordinarily low levels of the prepandemic years. Yet the best evidence points to the opposite conclusion.

Unemployment reached 13.3 percent on May 31, 2020, and then fell to 7.9 percent by September 30, 2020. There’s no reason to believe the unemployment rate will decline sharply from that level or get anywhere near full employment for years. There are two reasons for this. The first is that the economy was weak before the pandemic. White House claims of “the greatest economy in history” were true only if you counted nominal GDP, in which case that claim is almost always true—and meaningless. What matters, and what Americans care about, is real growth, because that’s how jobs are created, businesses grow, and innovation takes place. Annual growth during the last expansion (2009–19) averaged 2.2 percent, the weakest expansion in U.S. history. Most annual growth figures were very close to that average, with no years showing even 3 percent growth. Importantly, there was no material difference between growth in the Trump years of the expansion (2017–19) and in the Obama years (2009–16). This 2.2 percent growth compares with 3.2 percent growth for the average of all expansions since 1980. In the 1950s and 1960s, the average annual growth rate was above 4 percent.

The U.S. economy was weak before the pandemic. Many businesses were barely getting by; many more were contemplating bankruptcy. The pandemic was a perfect opportunity for weak businesses to conduct mass layoffs, file for bankruptcy, close locations, or close their doors completely. The first wave of layoffs (March–June 2020) was hurried. The second wave of layoffs (from October 2020 through 2021) will be more studied.

By 2010, total employment was back to where it had been in 2003, but no higher. It’s as if job growth had stood still for six years. Over the next ten years, the United States gained over 20 million jobs, first under the Obama administration, then during the first three years of the Trump administration. The long recovery (2009–19) was weak, but it was steady—the longest continuous economic expansion recorded in U.S. history.

Then came the New Great Depression. The United States lost over 60 million jobs from March to September 2020. Total employment is now back to levels last seen in the 1990s. It’s as if job growth had been on hold for three decades. This setback took only six months.

This level of job losses defies description. While it’s easy to recite statistics, it’s impossible to convey the human impact. Every job loss is an individual trauma, throwing each laid-off worker into a highly stressful situation: wondering whether they can feed their family, pay the mortgage, and meet obligations for health care or school tuition. When that trauma is expanded by perhaps seventy million (taking into account not just the unemployed worker but also her family members), one begins to get some sense of the magnitude of the collective trauma that has struck America.

An even longer perspective adds to the sense that we are in a new depression. Consider job losses in every recession since 1948, a comparison that includes severe recessions in 1973–75 and 1981–82 and the 2008 global financial crisis. Each of those three recessions was cited as the “worst since the Great Depression” at the time they occurred. That was true at the time; that truth was superseded by the later recessions, which got worse. While those record recessions stand out (along with severe recessions in 1949 and 1958), none bears comparison to the 2020 New Great Depression. Job losses now are greater than those in the last four recessions combined.

There’s an even more disturbing reality than total job losses. This is the income distribution of the newly unemployed. Less than 10 percent of 2020 job losses have hit those in the top 20 percent income bracket. About 55 percent of total job losses have hit those in the lowest 40 percent income brackets, with about 35 percent of total job losses concentrated in the lowest 20 percent income bracket alone.

Blue-collar jobs are the backbone of the real economy. These workers are the ones on whom we all depend for restaurant meals, hotel accommodations, dry-cleaning services, banking transactions, and the countless everyday interactions that make up our lives. Small and medium-sized enterprises (SMEs) contribute 45 percent of GDP and provide almost 50 percent of total employment. By gutting these jobs, we have gutted the U.S. economy in ways that may take a decade to repair.



Almost overnight, the 2020 New Great Depression slammed the LFPR down to 61.4 percent by September 30, 2020, about where it was in 1970. Again it was as if the U.S. economy had been transported in a time machine to where it was fifty years earlier. A half century of gains for women, minorities, and the disadvantaged were wiped out in the blink of an eye.

This news will get worse.


Productivity doesn’t move much in a mature economy. Still, it can change. Lately, productivity has been declining slightly for reasons economists don’t entirely understand. It may have to do with an aging demographic or the fact that we use technology to waste time instead of getting work done. Productivity is one reason that economic growth had been slow for the ten years prior to the pandemic.


Now labor-force participation has collapsed. The reported data have not caught up with the reality. LFPR is likely to fall further, to 61 percent or lower. This is partly because some currently unemployed will decide they are retired or can’t get jobs and simply drop out of the labor force.

These losses will not be temporary, as unemployment sometimes is. These losses will be permanent as skills, social networks, and references dry up. This is catastrophic. It means that even as businesses reopen and some unemployed get jobs back, others are never coming back to the workforce. Output will be permanently impaired even if productivity picks up a little. The drop in LFPR has been a cliff dive. The economy is underwater as a result; output will remain submerged, perhaps for decades.




As for a second wave of COVID-19, almost no official wants to talk about it publicly; few even understand what it means. A second wave of infections is not caused by a return of exactly the same virus. It is caused by a mutation or genetic recombination that can create a new variant even more lethal than the original form of the virus. History and science say we should expect it, yet almost no one is prepared. Most assumed the country would be past the plague by late 2020. There is no certainty in that forecast. A more lethal wave in 2021 is an open possibility.



As for a rapid economic bounce-back, the 2020 White House happy-talk brigade, led by economic adviser Larry Kudlow, said all will be well. They spoke of “pent-up demand” that will come roaring back to restore jobs and business profits in a matter of months. They spoke of a soaring economy in 2021. Don’t bet on it.

In the first place, many businesses that closed for the lockdown will never reopen. That’s not merely because of lockdown orders; it’s because they’re broke and out of business.


This trend toward more saving and less spending began in late 2019, even before the pandemic. It’s as if Americans saw the recent crash coming. Perhaps some did. It’s probably more reflective of the fact that the economy was weak even before the pandemic. What that means is that the spread should widen even more. Savings will soar and spending will contract sharply.

That’s a smart strategy for individual citizens worried about jobs and their portfolios. Still, it’s a disaster for economic recovery, at least in the short run. A high savings rate makes mincemeat out of forecasts from most media prognosticators and public officials. There will be no sharp, fast bounce-back for the economy. Growth will emerge, yet it will be slow. The recovery will be long, hard, and painful for affected individuals, entrepreneurs, and those seeking a job. College graduates in 2020 and 2021 will bear more than their fair share of the burden as entry-level job openings evaporate as employers struggle even to rehire the existing workforce.


The depth of the new depression is clear. What is unclear to most observers is the nature and timing of the recovery. The answer is that high unemployment will persist for years, and the United States will not regain 2019 output levels until 2023; growth going forward will be even worse than the weakest-ever growth of the 2009–19 recovery. This may not be the end of the world, yet it is far worse than the most downbeat forecasts. The evidence to support this outlook is in plain sight.



That’s the reality of a depression. It’s not about continuously declining GDP. A depression is an initial collapse so large that even years of high growth don’t dig the economy out of its hole.



Some causes of this weak growth were discussed above, including a second wave of layoffs, government incentives to delay a return to work, bankruptcies, a collapse of world trade, a growing work-from-home business model, declining labor-force participation, and recursive functions whereby weakness begets weakness in upstream supply chains. Still, there’s another factor that may dominate these trends and ensure low growth—that factor is high savings.



Based on the most rigorous study available, our projections of slow growth for several years are too modest. The best evidence points to slow growth for thirty years.


All of these elements—more layoffs, more bankruptcies, feedback loops, and a spending strike in the form of higher savings—mean the recovery will be slow and unemployment will stay high. There will be no V-shaped recovery. There are no green shoots, despite what you hear from the media. We are in the New Great Depression and will remain so for years.
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Re: New Rickards book!

Post by Hal » Thu Jan 14, 2021 4:59 am

Great summaries Vinny,

Keep up the good work!
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Re: New Rickards book!

Post by vnatale » Thu Jan 14, 2021 11:33 am

Hal wrote:
Thu Jan 14, 2021 4:59 am

Great summaries Vinny,

Keep up the good work!


Thanks. It was such excellent, compelling reading, that it kept me awake until almost 3:30 AM.

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Re: New Rickards book!

Post by vnatale » Thu Jan 14, 2021 2:49 pm

https://koanewsradio.iheart.com/content ... -pandemic/



Colorado's Morning News
Navigating Financial Uncertainty Amid and Post Pandemic
Jan 14, 2021





We talk with James Rickards, author of "The New Great Depression: Winners and Losers in a Post Pandemic World" about how to navigate things financially in 2021 amid all the uncertainty.
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