Experiential Wealth, Inc.
Experiential Wealth, Inc.
Experiential Wealth, Inc.

COVID Policies & The Economy

Sep 1, 2022 | Everything Else

There’s this fatigue, COVID fatigue occurring. There is a resurgence of COVID that nobody wants to talk about. Luckily, it is a mild form. We have transitioned from calling it pandemic to endemic.

Whatever we want to call it, COVID is not going away. COVID is here to stay. More importantly, COVID is an international, global issue. COVID is not just a U.S. issue. We tried closing borders, we tried restricting travel, nothing quite worked because COVID doesn’t recognize borders.

COVID is a reality that we now ignore until we get it. Then you say, “Well, gee, you know, maybe I should have done this, done that.” People are tired of it.

What does all this mean?

For the U.S., we will not have shutdowns, we are going to live with it.

However, this does have an economic impact. How much of an impact is hard to quantify as it depends on if there’s an uptrend, downtrend, resurgence. We believe as typical with winter, when we are no longer socializing outside, COVID will return in a more meaningful way. That may have a marginal economic impact.

But, we do not live alone on this planet…the economy does not just live in the United States.

The U.S. is moving on but that’s not true for China. In the case of China, they have a COVID Zero policy. COVID Zero policy means COVID Zero.

We know that it is almost impossible to have zero COVID as it is now endemic, meaning China will continue shutting down, and impose draconian steps in an attempt to minimize COVID. That is a great expectation, but we do not believe they will reach COVID Zero.

In turn, this will hurt their economy, and it is already showing signs to that effect. Their GDP (Gross Domestic Product) was barely 0.4% for the second quarter – 0.4%, which is essentially zero. We believe, they HAD to say 0.4 because realistically it’s actually -0.4, but China needs to save face as the number 2 GDP globally.

Our prediction is that China will change the internal COVID policy but will continue to publicize COVID Zero. Even if they change internal policy, COVID will still have an impact on their economy, which is the second largest economy in the world.

With the second largest economy in the world still contending with COVID, even though the largest, the U.S., is not, we predict a drag on global growth. The drag will be due to an impact from COVID, despite the fact that most countries have removed COVID protocols and restrictions.

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