Since my first article at the beginning of February concerning the Kung Fu Virus titled The Sneeze Heard in Wuhan City China – Felt Economically Around The World and the subsequent articles on this subject (Links at the end of this article) I predicted correctly that this pandemic was not going to be as much of a health issue as an economic one. If we reach the predicted CDC death estimate within the United states of 60,000, this does not compare in any way to the deaths caused by the Spanish Flu during the years of 1918 and 1919 where an estimated 500,000-850,000 died. Keep in mind that there were three waves of that pandemic. June to September, then October to December 1918, and last February through March 1919. The middle outbreak was 3.3 times higher than the first outbreak. The February through March 1919 outbreak was 1.5 times the first months of the Spanish Flu pandemic in 1918.
If we were to use the Spanish Flu of the earlier 20th century as our model and using the current estimate of 60,000 deaths during the first period of this pandemic we could have a second outbreak starting in September or October. Continuing to use the Spanish Flu model death numbers the Kung Fu Virus could rise to 200,000 deaths. Then another 90,000 deaths in the early 2021 outbreak. I pray that my extrapolation is off; However, in my past life one of my strong suits was budgeting for businesses. I was rarely off.
With the newly released three-part-plan suggested by Mr. Trump earlier in the week states will start to relax citizen movement and non-essential business reopening’s. I suspect that as more and more states are successful and the virus does not creep up past an acceptable level we will see the DJIA recoup about 50% of its loss since February 2020. Gold will drop and ride the line between $1,600- and $1,700- an ounce, and crude oil will rise back up to $40- a barrel which surly helps out petrol prices we pay at the pump but puts a serious strain to our nations energy industry.
Unemployment will not return to the 3.5% mark for the foreseeable future however, it will slowly drop from its height of April 2020. With that written it will remain high as my guess is that only about 50% of the restaurants will reopen over the next 3-month time frame as restaurants will recover the slowest of all industries within the country.
The housing market will collapse similarly to what we saw in in the 2009-2012 time period. Foreclosures will increase which means there will be a heightened supply of homes and building’s on the market. Think buyers’ market. Here is a short article written last month by Harsh Chauhan titled, US Housing Market Bubble Bursting as Sales Plummet.
With all that doom & gloom written I want to thank the good Lord for giving us all the time before the next predicted outbreak happens this coming fall. What are you going to do with this time?
I suspect most folks will just return to work with a normalcy bias mindset. Then there are the folks who will use the next five month or so reprieve to prepare for the next drama.
Using the Spanish Flu model this is what I would suggest,
- Sell your house and use the equity for a hunk of land in a more rural setting. The next big economic whammy of the Kung Fu Virus is that housing and land prices are going to plummet. Remember the housing market of 2009-2012? People were being foreclosed on right and left. If you have been on the fence to sell or not sell your house get ahead of the curve and put your house on the market now before the glut happens. Try to get as much as you can for it and then buy foreclosed land in the fall.
- If you have any stock in the market, plan to sell it all in August – The first week of September at the latest. The next correction will be somewhere in the 50% range. Once you sell those stocks use the money to buy rural property as mentioned earlier or put the cash in US Treasury or Aaa Corporate bonds. If you choose to stay where you are and will not be selling your house in suburbia, then pay off your mortgage with your cash-out of the stock market.
- Buy food, enough for a year. Buy medicines, enough for a year. Buy ammo – 5,000 rounds for each long gun would be a minimum in my mind.
- Plant a Kung Fu Victory Garden. This will augment your food supply and force you to relearn skills. When spring of 2021 rolls around and the United States is in a greater form of hurt then today, you can feed your family and barter with extra crops. Keep in mind, to supply one person for a year with vegetables you need 1,000 sf per person. Four people in your family you need 4,000 sf under cultivation. That leaves nothing for bartering though.
- Hone a skill. You can always barter labor for what additional your family needs. DO NOT BARTER AMMUNITION for Pete’s sake. Ammunition is perishable and to a degree irreplaceable at even today’s prices.
- If you have the above all taken care of then think about some precious metals. First silver. Buy a combination of 1-ounce silver rounds and junk silver. If you want gold wait till it drops down closer to $1,600- an ounce, then buy it. Gold is only good for one thing in my opinion and that is larger purchases. Tractor, land, cow, house, horse, etc. you get the idea.
- Become reacquaint with our Lord and Savior, Jesus Christ.
So, there you have it, Ol’ JohnyMac’s thoughts on our future. Also remember, the economic future here in the United States certainly looks bleak however, just think of what it looks like in Socialist countries across the pond. PLEASE, do not allow normalcy bias to again take up space in your lives.
73 & God Bless
Freedom Through Self-Reliance®
Economic Articles Written By JohnyMac Since February
The American Partisan Lawyer weenies asked me to state that the above article is based on my opinion and should not be used as an absolute but for discussion purposes only.