Tuesday, February 25, 2020

How bad will be the economic impact from Covid 19.

The first case of Covid 19 was thought to be on 31st December. The belief was that the source was the wet market in Wuhan China, where because of the Chinese's penchant for consuming wild animals for heath reasons the virus jumped from animal to humans. Irony perhaps but very reasonable and believable that the virus jumped from bats to humans through an intermediate host thought to be snakes.

Fast forward and we have a paper published in the Lancet medical journal, about a new study by Chinese researchers claiming that the first case of Covid 19 was actually on 1 December. The person was elderly and lived several bus connections away from the Wuhan market. As he was sick he never visited the market.

We now know that the incubation period could be more than 14 days and that a person is contagious before showing any symptoms. Most will recover without showing any symptoms at all, and yet will be spreading the virus without ever knowing it. This was probably why the contagion was so widespread in Wuhan as it is so densely populated and infected people were spreading it around without knowing it.

The research was published in the Lancet which presumably will have been peer reviewed and is credible. If this is true then we still do not know the identity patient 0 and the source. They will probably discover this through DNA tracing but for now it remains a mystery.

Covid 19 is now with us for good, deal with it.

Quarantine is probably no longer a way to ward off this virus now. By its' nature of being contagious even before symptoms shows and even after recovery, there will be no way to prevent this virus from spreading to any country in the world. No country will be spared. It will only be a matter of time. The emphasis will have to move towards detecting and treatment until we have a vaccine.


The first thing is to identify it from the common flu. The PCR method of detecting takes over a day and is thus slow however a Mexican company have a machine that can detect the virus within 3 hours and the unit is mobile. On detection the said patients can then be treated as best as a country's health services can offer.


Fortunately for a majority of people (80%) will only experience mild or no symptoms. The virus does not seem to affect young children or even infants. Of those who show symptoms most will recover. The fatality rate is currently expected to be between 1 - 2 % or even lower. Better figures will be fort coming as we get better methods of detection.

One cure which seem to work is to use plasma donated by patients who have recovered. Another treatment that seem to work is an antiretroviral drug used to treat aids. A vaccine is on the way.

Covid 19 may not kill you but it can kill the economy and that may kill you.

For all the rage, Covid 19 is not as bad as we fear. The fear factor factor however will be devastating. Even in countries where there are no cases, the fear of contracting the disease will cause people to stay indoors. This is devastating for any service driven economy. This mentality and behavior will plunge any country into recession.

The best thing we can do is to stay calm and prepare.

Lancet medical journal report on BBC

Mexican Covid 19 detection

Plasma treatment covid 19

Antiretroviral Aids drug to treat Covid 19 cases

Saturday, February 22, 2020

The Coming Global Recession and BSV

Come Monday ( 24 Feb 2020 ) the whole world will believe that a global recession is upon us. The black swan event that triggers this change in sentiment and perception is Covid 19. We have all now seen the effects of this virus and the toll it has taken on the Chinese economy. What has happened in China will now be repeated worldwide. This is now a pandemic.

Covid 19 is a global pandemic.

The most significant revelation is that the virus is contagious 3 to 5 days after infection and the individual exhibits no symptoms until two weeks later if at all. Individuals have tested negative several times and only to test positive days later. The reason is that the Polymerase Chain Reacion (PCR) test that they use can only detect the virus if the viral load is "significant enough". Under this threshold the test will return a negative reading but the individual is contagious. This was what happened to the testing of health workers. This means that health workers who, presume are tested daily returning negative result but is contagious and infecting everyone they come across in their work until they tested positive.

With the virus spreading within the population two months before it was even identified as a new strain, the virus would have had the opportunity to spread worldwide. Like in China those who were sick outside of China would have assumed that they just had the flu until the world was alerted and they started testing for it.

It is too late. Covid 19 is with us like the common flu. The good news is that for the majority the effects are mild. As to how lethal the virus is, the jury is still out. The best estimate is 1 - 2 % and mostly among the weak and old.

Another interesting observation is that there could be several "flavours" of the virus and that a person can be reinfected with the reinfection being even more serious. This is a nightmare scenario if true. ( There are 4 strains of the Dengue fever virus and immunity from one does not apply to the other three )

World in recession.

GDP output in China is expected to be negative for January and February with the country in quarantine and shutdown. Being the second largest economy, a source for global tourism, investments and a major hub in the global supply chain the whole world is affected.

With this sentiment and perception dawning on the world economy, every country in the world will embark upon fiscal and monetary policies to dampen the effects of the oncoming recession.

Most central banks have been printing money ( monetary policy ) and the result was inflation in assets and stock market. The real economy was largely untouched because a deflationary cycle was occurring in the real economy with products being ever cheaper due to efficiencies, economies of scale and globalisation.

The tables are now turning. Come Monday we could see a crash in the stock market starting in Asia when we expect that company profits will be gravely affected. Money printing in this environment will not prop up the market which means that it may flow into the real economy pushing up inflation.

The problem is that most countries cannot afford inflation and rising interest rates. This only leaves the option of negative interest rates with ever increasing amount of money printing. The world will also be on the fast track to digital currencies as negative interest rates is ineffective without it. Without a digital economy negative interest rates will drive people to take their money out of the banking system.

Money printing and BSV

Money printing will not save the stock market but what about house prices? Presumably money printing in conjunction with negative interest rates should push up house prices. However in countries where house prices have been fueled by investments from China may see a reverse. With China going into inevitable recession the Chinese government may "request" that their citizens bring back money and investments that they have parked overseas.

We may see a movement of money into the crypto markets. This means huge increase in BTC and all cryptos.

Tie into this scenario nation states putting their national digital token on the BSV blockchain because it is the only public blockchain that can scale. This will lead to turmoil in the crypto market as well but BSV will come out the victor. When someone with the stature of Tom Lee from Fundstrat who clearly understands and warms towards BSV we can bet that behind the scenes positive things are happening for BSV.

BSV will emerge the winner

We may see everyone in crypto rejoicing in the short term but this will be short live. BSV will emerge the victor in the end.

Twetch will win. Your invitation to join Twetch

Twetch is Twitter on BSV. More than that it is Twitter monetised and permanently recorded on the BSV blockchain.

Why Twetch will win?

Older technology will be superseded by a newer technology if the new technology offers new features that are cheaper, faster, and/or better than the old.

Being cheaper and faster may not be the killer features to replace an entrench system but additional features that are useful and indispensable will. Monetisation on Twetch is this additional feature.

For Twitter, trolling is toxic. It kills user experience. Trolling is endemic because it is free. Putting an economic cost. even a fraction of a cent will bring the worst effects of trolling under control. Trolls cannot commercialise their business model on Twetch because it will be too expensive.

Putting your money where your mouth is. How true! When you have to put your money where your mouth is - You trend towards truth and honesty. Doing otherwise will cost you money.

Your invitation to join Twetch


Monday, February 10, 2020

Another spike in BSV price today!

"BSV jumps 17% out of nowhere" says one headline. It is actually greater than 25% really but the gist of the headline was it jumped 17% when all other cryptos were in bear mood. When BTC passed 10,000 the whole market of course rebounded including BSV.

Why did BTC pass 10K ?

My take is the slowing global economy prompted by the corona virus ( nCov ). The effects on commodity demand due to China shutdown is being felt. Oil has plunged 20% with little hope of it recovering in the next 2 quarters. The ramifications of this is huge as the price of oil affects highly leverage shale producers immediately and Saudi Arabia needs oil at $80 to balance its budget.

Supply lines have been disrupted leading to many factories including Hyundai, outside China, also shutting down. A consequence of today's just in time production, and this was only due to one week shutdown. China restart was planned for Monday Feb 10 but this may be extended by another week! The mood has changed, lost production, revenue and profits may never be recovered. The long touted recession may finally be here despite all the money printing by reserve banks around the world to avoid it.

Excessive money printing can only result in devaluation of fiat currencies worldwide. Some countries like Columbia and Zimbabwe have adopted the US dollar because their own currency have failed. However, all fiat currencies have only 1 outcome - a move to zero, as governments can never stop printing to offset tax deficits. Normally the affected country will just reset with a new fiat currency but today with the options of digital currencies and cryptos there are choices.

Why the increase in price for BTC

BTC proponents want you to believe that the moonshot is near or here. I believe that BTC price increased because it is the main gateway for new money to flow into BSV. If this is true then the next phase will be for BTC price to fall while BSV rises.

Thursday, February 6, 2020

Corona Virus and Economic Impact

The above show 549 deaths in Hubei out of 564. The death rate in Hubei is way above any other cities even in China. So why is this?

Professor Michael Levitt in the interview below suggest that the death statistics looks more like an instance of poisoning than a viral epidemic because of the localised nature of the deaths concentrated in Hubei. Secondary cities including cities out of China show death rates consistent with the common flu.

What is different about Hubei.

To understand this we have to appreciate why Chinese choose to consume exotic meats. Older generations being generally less educated, believe that consuming such products will benefit them health wise or cure them of certain ailments.

We know that Corona virus jumped from animal to human. Quite likely there was a sick animal which pass the virus to all the people handling it. These people will be the core and source of the infection. Perhaps consumption of the meat was also a health risk especially among older people.

The next round of infection are those that came into close contact with carriers which was made worse by the ability of the virus to spread even in its' incubation stage.

The red flag was first raised on 31st December 2019 and city wide quarantine imposed on January 23. Exposure through close contact probably stopped soon after that as everyone becomes aware of the risks. Quite possibly the virility of the pathogen is greater through direct contact and less from passing proximity or contaminated surfaces.

If 2019-nCov is a deadly killer virus the death rates in the whole of China would be exponential by now rather than tailing off. It is probably less of a killer than the common flu, unless there is close contact and direct exposure. The fact that it can be spread during its' incubation period is what will lead to the virus spreading worldwide and perhaps would be unstoppable. The only solace will be its' low fatality rate.

Is China To Blame?

Viral mutation is a natural phenomenon. It could have happened anywhere. It is fortunate for us that this strain struck in China at this time! Within 7 days of notification Chinese scientist were able to sequence the genome and place the whole cities of the nation under quarantine to stop the spread of the infection nationally and globally. No country in the world could or would be willing to take such draconian measures at such huge cost to their economy. We should be thankful that China did.

We have now learned much about this virus and much will now change. China would probably ban all live wildlife markets and this time it would probably stick. Old superstitions die hard and this experience will hopefully change worldwide attitudes and give new hope to wildlife and endangered species.

As 2019-NCov will most probably remain with us from now on, our attitudes towards personal hygiene, social behavior and cleanliness will change for the better.

Economic Impact.

China is the biggest importer and consumer of crude oil in the world. When China shut the taps crude prices fell 20% immediately. This shows the demand pull on oil prices and emphasis the potential for China to influence crude prices into the future should she wish to do so. OPEC no longer control oil prices. China does. Let us hope that she refrains from implementing a China first policy.

Looking further into the future, oil is a sunset industry with renewals and electrification of transport playing a greater role each year, countries reliant on oil do not have much time left to transform their economy. Elon Musk commented that it would only take 100 X 100 miles of solar panels to power the whole of the United States and a battery bank 1 X 1 mile to do so.

With China closing down its factories for an extra weeks many factories located in other countries also needed to cut or close production because they depend on China's supply chain. It would be difficult to change this reliance and dependency.

More that 140 million Chinese tourist visit other countries each year and many countries will take a hit economically as this revenue source has been completely shut both by China and by the receiving countries. How will China tailor its outbound tourism going forward, after this crisis?

Current estimate is that the world will take a 2% GDP hit in the first quarter of this year with China hit particularly hard. How will the US react to slow or reduce purchases from China as agreed in their phase 1 agreement? To raise dollars China can always sell treasuries and this will not be good for the US as it is still running bigger deficits each year.

A compromise will be found. If anything this episode have highlighted the fact that we have to live together as one people and one world. America first, China first or any country for that matter is a recipe for disaster. There will be a global recession just around the corner and this time there will not be a China pump to bail us out. We will have to do it together.