by Rahim Taghizadegan
Mises.org
We may currently be facing the biggest economic crisis of all time, because it is a multifaceted crisis: first, there is the pandemic with its disastrous direct consequences for tourism, the service sector, and trade. Secondly, there is an oil price shock with a geopolitical background. Third, there is a shock caused by supply chain disruption due to heavy reliance on just-in-time production and distant producers. Fourth, there is a crisis of confidence due to differing risk assessments and disagreements about whether Western governments are guilty of negligence or fearmongering to massively restrict civil liberties. Finally, the ultimately inevitable correction of an overstretched “everything bubble” in which the traditional instruments of monetary policy have been exhausted.
We are dealing with a stroke of fate, but not with a “Black Swan” event. None of the crises were unpredictable in themselves, least of all the pandemic. In 2012, a study commissioned by the German Bundestag had already analyzed and done detailed calculations about the scenario of a pandemic caused by a SARS-like virus, with alarming results.