Let's start with the economy.
A report by restaurant industry insiders says that 28% of restaurants will not reopen and another report says that 17%-24% won't make it 90 days after they open back up. That is a lot of jobs. We could lose half or more of the restaurants and since they are leaning the staff even now, we could lose over half of the restaurant jobs.
States can't print money and they don't have much coming in. Most states are in trouble with their pension funds and all kinds of debt, municipal bonds and such. The Federal Government doesn't want to bail them out, so they are talking about legalizing state bankruptcies. Who doesn't believe that would be a revolving door it they open it? So expect states to put their hand into your pocket anyway they can. Property taxes, fees, car licenses, car tags, sales taxes, inheritance tax, just about everything.
They are using the virus to advance digital currency, that is currency they can tax every time you buy something, track you with and even shut down if they don't like what you are doing or your opinions about the government and I don't know, say vaccines, shut downs, gun laws, church attendance and just about any other popular topic today. This one really concerns me. You should see the documents that are public. It is a dictator's dream and they are already using a social score in China to oppress people.
Social Security and Medicare, you didn't forget them did you? Both were heading toward bankruptcy and if you spend more than you take in Social Security qualifies now. The strain on both of these systems will only make the problems worse. Medicaid was a disaster before and it is looking like a third world disaster now.
Retirement, or what we used to call Retirement. There are a lot of people that lost something like a third of their retirement funds. I don't know why people do this, they just stay in the stock market no matter how many times it crashes and burns people's retirement plans. Of course the "Experts" say stay in the market and this time will be different, but it never is. These means everyone moves down a level in the game. If you were about to retire well off, you won't retire so well off. If you were about to retire so-so, you will retire with big cuts in lifestyle or have to keep working. If you couldn't work due to health issues and were going to scrape by, you will be below water. And the worst...people that weren't making it before, well, probably suffering and an earlier death.
Inflation, remember Jimmy Carter and the Stagflation years? You will eventually see inflation for everything a poor person has to have to live. There will be some deflation on things the middle class used to buy, but now can't afford. You could easily argue there is no middle class now. Rent will go up and "shelter houses" will go up in price. What is a "Shelter House?" A house that is plain and basic with no frills. Food will go up in price. Things we used to get from China will go up. A lot of medicines will go up. Healthcare will go up. Insurance will go up. You don't expect the insurance companies to take a haircut over this do you? They have already lost a lot of money they had already planned on spending.
Then there is oil. People were paying companies to haul off the oil they owned. They couldn't sell it and they couldn't store it. So, instead of paying for oil, they paid you to come get it. We are looking at about a third of the oil companies going bankrupt by the end of the year, with the first filing now. These aren't the big companies you have heard about, these are the smaller companies that employee a lot of people. Mom and Pop's, midsize investment companies and regional oil development and supply companies. It could add up to maybe half of all oil jobs and then affect maybe four jobs for each person that supplied things to those now unemployed people.
And there is War. When you have all of these international issues and governments deep in debt with popular opinion turning against them, it isn't a stable time. It was already that way before the virus. Add the virus and the fact that many governments base their economy on oil sales and oil sales have backed up like a UPS Delivery Truck and you are sowing the seeds of War. I expect more armed conflict with new start ups over the next 18 months.
And at least for this article, last but not least, food shortages...
They are killing chickens and burying them. They are pouring out milk. They are sending milk cows to slaughter. They are killing and burying hogs. We already had the African Swine fever taking out entire country's hog populations overseas. They are behind on planting this year. They have shutdown a number of food processing plants indefinitely and with weather problems this year and the last few years, companies cutting back and closing processing plants last year, we already were headed into a food crunch. Now call it a shortage, even a hunger/starvation event in some countries.
Not exactly an economic issue is civil unrest. They say if we miss 7 meals we are going to see rioting. We already see people that have lost their minds over this virus. Then there is the power grab and those fighting against it. Stimulus checks won't keep people in check if they can't buy food.
I expect more than the normal protests and riots this election season.
So is it all doom and gloom? No, there are a lot of opportunities and most of us will make it through all of this one way or another, but think twice before you say we should extend the lock downs. Already the virus response will kill more than the virus over a period of time. We should focus not on shutdowns, but on how do we open up safely?
Best and be blest,
Scott Hogue CCFC, CCA