Expecting the Meltdown
#geostrategy
Due to the unfolding meltdown, a general 50% fall of the global economy is expected (relative to the 2019 level). This means the real sector, not virtual self-leases, hedonistic indexes, over-bloated services, and other wild fantasies. At the same time, for the developed countries the talk was about a 70% shrinking, while the rest have options – to repeat the collapse of the developed countries, to get off cheaply, or to launch the programs of recovery and replacement.

In 2019 indirect estimates suggest a 15-20% slump in the world's real economy, and in 2021 it's going to be another 10% down from the 2019 level. Unfortunately, it's difficult to assemble an objective picture – emission is considered to be income, making use of the temporary sterilization in the Valley of the Pyramids, and different approaches are juggled. An illusion arises that if the world can be held in lockdown for a couple more years and then it all comes to an end, then we would be at rock bottom, push off, and start growing once more.

The trick won't work. The first problem is the fact that the Valley of the Pyramids will have to be brought down, since its size will be many times greater than that of the real sector and there will be no opportunity to allow stock exchange operators to lock in profits even minimally. The downfall of the bubbles will hurt the economy badly, giving it an additional impetus to reach a new low.

Another factor is even more significant – while lockdown remains in force, the laws, principles, and restrictions of public sphere (economy, social life, politics, etc.) are placed on hold in the harshest way possible, preventing even minimal attempts to adapt to the future conditions, to reorder and turn around the situation. The world lives by the logic of a V-shaped recovery, a return to the past way of life, and constant mass scale supportive intensive care.

In the natural course of the processes, most of the artificially supported machinery would evolve and change at its natural speed; it would be painful but necessary. Now all those supports, patches, and crutches will simply collapse simultaneously, burying under their own momentum even the things that could have held together. The longer the lockdown restrictions last, the more an additional slump will be, even to the point of transition to nightmare scenarios.

And yeah, a collapse and the beginning of a visible meltdown is a lesser evil, so the sooner, the better.

The Russian version can be found here