Our society has become very complicated; Our supply chain is very complicated. So when you shut down big cities in China like they are currently doing, It could lead to economic collapse.
And obviously, when you look at how our economies are intertwined, and how they are depending on each other, It becomes pretty scary pretty quickly. When you have a situation in which the banks are very fragile and they take so big risks, any type of black swan event such as for example this coronavirus outbreak could be devastating to the banking sector both in China and in America. Our economies do not work in silos, they are all interdependent, so when something happens in one country it always affects everyone else, especially when it is a big country with a big economy such as China. Whether you live in China or anywhere in the world, your life will be affected by this coronavirus, because all economies today work by supply chain, our world is extremely complicated, we are using economies of scale .
Meaning that we have this global supply chain, where many many countries are involved in every product that you consume. Everything that you buy is being produced by 20 maybe 50 different countries in one way or the other. If the coronavirus keeps on spreading we might see other cities shutting down as well and bigger chance something more serious like a Chinas yuan crash or an economic meltdown. Chinese stocks crashed 9% on Monday as markets reopened from an extended Lunar New Year holiday. The Shanghai Composite Index is on track for its worst decline since August 2015. The number of confirmed coronavirus infections now exceeds 17,300, with the vast majority of cases in mainland China. There is a huge risk that a chinas yuan crash happen if things will getting worse.
Wuhan this 11 million city that has been shut down is the hub for transport and industry in central China. The economic effects of this are going to be catastrophic for the global economy but especially for China. Especially the Chinese economy is still fragile and a coronavirus is an event that could tip the Chinese fragile economy into economic collapse. The lockdown measure adopted by various cities in mainland China will be devastating for the Chinese economy as millions stop going to work and stop producing and consuming.The CCP was more concerned with ensuring that the Chinese population doesn't go into full-blown panic rather than handling the Corona Virus situation. The CCP suppressed social media about the virus and warned medical professionals from speaking about this outbreak. This is what happens with a government has full and total control over its population, information like this comes out too late. Hopefully, it is not too late for many of the Chinese population.
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