COVID-19: Is the Great Outbreak a Sign of What the Future Has Stowed for the Human Race?

53 Pages Posted: 11 May 2020

See all articles by John Taskinsoy

John Taskinsoy

Universiti Malaysia Sarawak (UNIMAS)

Date Written: May 10, 2020

Abstract

COVID-19, the novel coronavirus pandemic, placed the U.S. economy (and capitalism) on a ventilator. A new recently published study has revealed that close to 90% of patients who needed ventilators to breathe did not make it. Of course this is a metaphoric inference, but valuable lessons provided by coronavirus crisis should not be ignored as the previous signs were in the past. The Fed must realize that “creating money out of thin air” (i.e. credit expansion) is nothing but “"legalized counterfeiting" which will only foster even greater pandemics and financial crises in the near future. Since the Fed was created in 1913, financial and economic crises have become more damaging, longer lasting, and costlier. Every time a high-magnitude crisis strikes (financial, economic, or pandemic), to calm people and restore confidence, governments of advance nations and their high profile central banks (Federal Reserve, European Central Bank, Bank of Japan, and Bank of England) rush to enact unprecedented economic relief/stimulus packages which got larger and larger over the years but sources of systemic crises have remained unresolved since the stock market crash of 1929 and the subsequent Great Depression. In today’s economy, $5 trillion or $10 trillion virus relief package is mindboggling, but will it be enough to prevent a looming recession? A better question to ask is, will the Fed’s infinite money creation out of thin air send American capitalism on a ventilator to the burial ground? In the near future (by 2050), global warming induced climate changes and the resultant catastrophes will make the coronavirus pandemic trivial. Unfortunately, one thing that never changes, in the long-run great financial crises and pandemics kill deprived people in developing and poorest countries.

Keywords: COVID-19; Coronavirus; Pandemic; Financial Stability; Credit Expansion

JEL Classification: O31, G12, E42, C40, Q32, Q54, H23

Suggested Citation

Taskinsoy, John, COVID-19: Is the Great Outbreak a Sign of What the Future Has Stowed for the Human Race? (May 10, 2020). Available at SSRN: https://ssrn.com/abstract=3597434 or http://dx.doi.org/10.2139/ssrn.3597434

John Taskinsoy (Contact Author)

Universiti Malaysia Sarawak (UNIMAS) ( email )

94300 Kota Samarahan
Sarawak, Sarawak 94300
Malaysia

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