Will China’s Coronavirus Destroy World Economy?

The news is filled with reports on the spread of the deadly coronavirus that originated in
Wuhan, China, site of a Chinese bioweapons facility. It seems that every hour, there are more reported cases of coronavirus in more countries around the world. With each report, we hear of more people being hospitalized and dying and more being quarantined for suspected contamination by the virus. In fact, the list of cases is growing so fast that any figures I write at this point will be already outdated by the time this report is finished.

In many of the news reports, it shows a growing number of people wearing masks to prevent catching the coronavirus, but leading health experts say that the vast majority of these masks make little difference in preventing being contaminating. After the CDC declared the coronavirus to be a major health hazard, the World Health Organization finally declared a global health emergency.

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There are reports of school kids being confined in Wuhan as China begins shutting down the area. Travel in and out of Wuhan is being stopped. Additionally, more nations and health organizations have begun imposing travel bans to and from China. After the US State Department declared a Level 4 alert, President Donald Trump on Friday, declared the coronavirus to be a public health emergency in the United States.

Due to the outbreak and travel restrictions, a growing number of airlines and cruise companies have been canceling travel to and from China, even though the World Health Organization warns that travel bans are not going to help and even stated they are not a good idea.

This leads me to ask the question, will the coronavirus outbreaks and subsequent travel bans have a domino effect on the economies of not only the airlines and cruise lines, but on entire nations and the world as a whole?

The cancellation of flights in and out of China will definitely impact the airlines, costing them millions of dollars and placing jobs in jeopardy. The same is true for the cruise lines. This in turn will impact a number of industries that rely on the travel companies for a significant part of their business. When this part of the business dwindles, they too must look to cutting jobs and hours.

As workers lose jobs, then begin to default on payments and mortgages, it will lead to an increase in the number of foreclosures and bankruptcies. The ripple effect then becomes a wave that continues to grow larger. With more people losing jobs and homes, they purchase less of everything, which in turn forces many other industries to cut back and lay off workers.

If you don’t believe me, this is exactly what happened with America’s last recession. It all started when President Bill Clinton forced the mortgage industry to come up with more types of mortgages that would put more people in homes. They did exactly that, but those creative mortgages came with a devastating trap. After the first 3-5 years, tens of thousands families saw their mortgage payments increase beyond their means of paying. This led to foreclosures and bankruptcies which impacted the entire housing, construction and real estate industry. This led to other industries cutting back and laying workers off and the result was the devastating recession of the past 15 years.

It’s quite possible that the same thing could happen, only worldwide, as result of the coronavirus epidemic. This also causes me to wonder if this was part of China’s plan for releasing the virus in the first place? After all, their government has already proven they place no value on human lives, so could this be a plan to destroy the world economy? How better to destroy one’s enemies than to destroy their economy?