GLOBAL MARKETS

WHEN DO THEY HURT YOU?

If you are running around, panicked over not finding items such as a mask or worse, your prescription, you may want to reconsider the whole concept of, "Global Markets". You see, here is the trick to everyone clamoring for a global market. If times are good, then the concept makes money for those companies buying and selling their goods. But, and here the where this virus comes in, when times get bad, even dangerous, that same global economy, well, it can kill you! 

Single Points of failure: 

Are there some items that should not be part of the global market process? Yes, pharmaceuticals are cheaper from overseas, but what happens if that supplier cannot produce? How long does it take to compensate for lost capabilities, overseas capabilities? Is that predicted period of time sufficient to keep the public confidence in the process? What happens if it doesn't? I had a discussion on this topic with a person who I consider to be one of the most optimistic people I know. Here was the crux of the conversation. 

Them: " If other suppliers know there is a demand, then they will step up production and the gap will be filled." 

Me: " Got it, but that's a normal world answer. When the world is sliding far away from, 'normal', then what? How do overseas factories produce the items others may need if no one is working at the factory?" 

The conversation went on for a few more minutes, but in the end, I won! The inherent risk of a global market is the development and acceptance of single points of failure. In a typical world, the gains of a global market outweigh the risk. here is the problem. deadly or not, this is not a typical event. The media, to include social media is driving people into a panic. Just yesterday in Iran, people burned down a clinic because they "heard", rumor, it was treating virus patients. One of Ayatollah Khamenei's top advisors died in the past 24hrs and several other key government leaders are sick. Panic in Iran is now two-fold. 1. The people know the government will not do anything to really support them. 2. Tehran is scared sick over losing power to an angry public. All of these types of issues create the next real issue. In a time of crisis, those that can produce tend to keep what they make. If China makes 90 percent, close I think, of the world's medical protective gear, and they can't bet their workforce to go back to work without knowing they are protected, where do you think Beijing's priorities rest? By the way, just how bad is China's economy, that global juggernaut, damaged? Take a look at this satellite photo. the lack of pollution means what? Yep, the lack of factories working, people moving. you want to see a picture that scares the Emperor to death, that would be one of them. 

The Cons vs the Pros: 

People are like cattle. I said it just last week on this blog site, but I will say it again. Spook the public, any public, and the issue, whatever it is, will get worse, much worse. Stores in the US are now limiting the number of sanitizers people can buy.....cattle. Reports of California stores running out of Toilet paper, I'm still thinking about that one and bottled water. I didn't think California would allow bottled water. I guess as long as you don't use a straw, it's ok. Look, the more the media talks, the more spooked the cattle become, and what are they looking for, what are they willing to commit a crime over? Yep, those items that they depend on someone else to provide them. 

Global markets. It's a great idea in normal times. We are not in normal times and that slight risk every government and every corporation was willing to take, well, that risk is now the reality. The trick to a successful gambler is knowing when to cover their bets, and that's something most nation's didn't do. Here is my closing comment, and it's based on events taking place between Turkey, Syria, and Russia. When governments get in trouble, real trouble, they look for a distraction. The more saver the trouble, the larget the distraction needs to be. Think about it. Better yet, think about what's going through Xi' s mind right now.