Yes. A LOT of money!
I'm not sure how to think about this.
In my opinion, quite a lot of money is based on a house of cards.
Also known as speculation and inflated books.
I do see a serious reckoning.
Perhaps even a financial bloodbath.
Which, in my opinion is a correction. Albeit a big correction.
Companies that do not supply REAL goods will be the first to fail.
Thank you Gitiana for being so astute.
This may well be the true story that makes our history.
Just my opinion here....
You’re absolutely correct that the world market is going to take a beating over this outbreak, I would go as far as to say it will be more like a blood bath!! But today’s financial structure is a lot different than it used to be.
The US, as well as most large economies around the world used to be based on the “gold standard”, simply meaning that all (or specified percentage) of their paper money was backed by actual gold. With this system, a country’s wealth was directly tied to the real global value of gold. In other words, a $10 bill was more of a gold certificate. We would exchange the $10 bill, but it was backed by $10 worth of actual gold held in the Federal Reserve.
A lot transpired through the years (a lot of information in the attached links), but, in 1976, the US was one of the last countries to officially move from the gold standard.
Once removed from the gold standard, a country operates on “fiat money”
There’s a lot of information that has to be digested to get a full understanding of it (more than I care to know), but the bottom line is that most of the world economy is based on fiat money. The simplest way I’ve heard it explained is that the true value of a countries money is directly tied to the confidence level (faith) in the issuing government. So in reality, the world’s economy is TRULY BUILT ON A HOUSE OF CARDS!!
In some ways, IMO (based on my limited understanding of it all) this could be a really bad thing. Global wealth distribution is primarily determined by the level of “faith” in the world’s governments. With that in mind, a powerful country can falter, causing a loss of faith in said country, which could result in a total collapse of their financial system. Without physical gold to back their currency, there is nothing to hold that countries financial position in the world in place. THIS is one of the primary reasons we have seen & will continue to see world governments and world leaders make every attempt to retain faith in their country. THIS is one of the biggest reasons that countries (looking at you China) will attempt to bury the truth about a multitude of issues. THIS is why we will all witness heads of governments make statements that seem contradictory to the facts. Their primary goal is to maintain their countries standing in the world, and ITS ALL DRIVEN BY FAITH!!!
It’s quite the conundrum for all world leaders at the moment. It’s a balancing act of enormous proportions. None of our governments want to come out on the other side of this thing and find themselves reduced to the classification of a third world country (ok, that’s a little extreme and self admittedly hyperbole - but stated to drive home the point)
On the upside, any country based on fiat money has a lot more control over their own economy. Money can be injected to the market, or removed from the market to stimulate the economy. Recovery can be a lot faster.
Sorry for such a long post, but I’ve seen multiple references by posters that fell money is being given higher priority than the citizens of the world. I just wanted to throw in my two cents worth in regards to some of the reasoning behind what we’re seeing. Just adding a different perspective...
Gold standard - Wikipedia
Fiat Money
