How Could The Coronavirus Impact The Markets?

It’s a true Black Swan event that stocks haven’t yet noticed.

By Chris Martenson of Peak Prosperity.

The 2019-nCoV “coronavirus” outbreak remains serious and fluid.

Over the past several days, we’ve been publishing a steady stream of videos, reports and podcasts to keep you as up-to-date and informed as possible on the science behind this fast-developing situation. You can follow our full coverage of the coronavirus here.

But the TL;DR version is this:

The first order of business is stopping the spread of the disease, which means prevention.  Your immediate and top concern should be readying yourself and your household and loved ones for the arrival of 2019-nCoV. We cover the most useful practices in this report.

Second, help your co-workers and students, passengers, or other such dependents become aware and prepared by practicing good hygiene and educating them about how the virus spreads.

IMPORTANT:  Anyone who is sick, whether with nCoV or a standard flu/cold, needs to be isolated for the duration of the disease, which means 24 hours after their last fever. They should always, always, always wear a surgical mask to block virus particles before they are expelled into the air.   Masks can be worn by everyone, but do the most good when worn by those who are ill.

But in addition to presenting a major public health risk, the coronavirus is already doing serious economic damage. China, the world’s second-largest economy, is essentially “closed for business” right now.

The disruption to global trade the coronavirus is likely to cause is going to be material, perhaps severe. And that will have serious negative consequences for the financial markets, which have been (and is still!) trading at the highest valuations in history.

The coronavirus has all the hallmarks of a true Black Swan event.

Markets & Global Economy Already Impacted

Note:  This is an extremely fast-moving situation and the data is coming in so quickly that it has to be presented as a mosaic.  I’ll do my best to make sense of it for you, but I really want you to allow yourself to trust your own assessment of what pattern the dots make. Much of this data has just been gathered this morning (1/28/20).

Remember: it’s not the fall that harms you, it’s how fast you stop.

For years now, the global economy has been debt-strangled and limping along, kept alive by constant central bank interventions and money printing. Like any weakened victim, the last thing it needs is any kind of serious shock.

The coronavirus has all the features of the proverbial Black Swan event we’ve long been worried about.  Nobody saw it coming, it hit hard and fast, and is spreading far faster than government bureaucracies and the markets can adjust

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