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Sunday, March 22, 2020

The coronavirus and its economical impact

With the coronavirus spreading from China since 2019 all over the world, every country is infected. The see more cases of infected citizens daily or more and more deaths. While the curve of infection flattens in China as of March 2020, Italy in Europe surpasses the number of deaths of about 200 casualties per day. With no vaccine available at this time the death toll rises. Two measurements are currently at hand, to stop the spread of the pandemic. Most countries implement the rule of Social Distancing. People shall remain in a distance of two meters, and groups of five or more people and gatherings, like venues are forbidden. Schools and other establishments, where many people gather, are closed. The other is that countries, especially in Europe, closed their borders and limit traffic only for trucks providing essentials. May grocery stores have empty shelves for toilet paper, sanitzers, pasta products and canned foods. Worse, many people did panic buying of goods, leaving following customers with no items.

Impact on the economy

No matter, how long this crisis goes on, companies like car factories and other suspended their business to avoid infections of co-workers. Assuming this crisis goes on for more months, these companies will lose billions of Dollars.

Impact on education

As most schools and universities have closed their gates, with students being in isolation at home, there is no education for months to see. Education will fall back for months or even a year. Development in science, health, physics and other topics might be rolled back by at least one year.

My opinion

I don't say, we're are sent back into the stone age. But stocks for the most important companies were halted. The Dow-Jones sticks at 19,898 points at this writing, a value not seen since late 2016. The decision of the New York Stock Exchange was announced to shift temporarily to an all-electronic trading, starting on March 23rd 2020. A precautionary step to lock down the trading floors temporarily, represents a step to protect the well-being and health of the traders in the floor company, to avoid an infection with the COVID-19 virus. Nevertheless, the economy worldwide will be hit hard. Losses of more than hundred Billion Dollars are expected.

The virus continues to hammer hard large sectors of the international economy. And will continue to do so for some coming months.