Economic Paralysis is not Economic Hibernation, but Economic Ruin
Aktualisiert: Jan 23
"Confusing economic paralysis with economic hibernation is an unprecedented mistake that will lead to economic collapse to countries whose fall in Gdp in 2020 exceeds -8%, "
Confusing economic paralysis with economic hibernation is a mistake that shines with its own light. An unprecedented error that will lead to economic collapse to countries whose fall in Gdp in 2020 exceeds -8%, and to bankrupt those unable to finance their public deficit.
Since mid-March I have been warning that the only possible solution is Economic Cryogenization and that economic paralysis would lead directly to economic collapse as it has been. I have practically been left alone in this complaint, which I have insistently been alerting to the danger involved.
Every time someone confuses economic paralysis like economic hibernation, I can only blush and exclaim: How much economic ignorance, and I always end up thinking When are they going to realize and listen to me?
Prestigious economists, economic editors, presidents of government, such as Spain's Sanchez, and even the IMF have confused economic paralysis such as economic hibernation, an unprecedented mistake in world economic history, of those who believe in knowing what they are talking about have plunged the world on the edge of the cliff.
We are facing an unsustainable situation, there has probably already been the ECONOMIC INVESTMENT in Spain, where the Public Sector has become the main generator of GDP, relegating the Private Sector that until 2019 generated about 60% of the Spanish Gross Domestic Product.
The problem is that THE ECONOMIC INVESTMENT has been caused by the fall of the Private Sector as a result of the economic paralysis decreed by the government, passing the government to lead the generation of GDP by demerits of its own. Most dramatically, the PUBLIC Sector's GDP generation depends not on the taxes with which to finance it, but on the Public Deficit. An increasingly pressing problem that leads to becoming an economic black hole that will end up engulfing the market system itself, if the economy is not cryogenized once and for all.
Every time someone confuses economic paralysis as economic hibernation, I can only blush and exclaim: How much economic ignorance!
As the best way to demonstrate that what I are defending now is what I signed up for in March 2020, then I set out part of Iberianpress's March 25, 2020 publication for the reader to draw his own conclusion.
"The only solution to alleviate the economic situation would come from a series of global measures that would guarantee the liquidity of individuals and companies. The ECB's solution to increasing liquidity to banks so that banks give credit to businesses, not functioning, did not work in the financial crisis since banks will not give credit to companies that do not generate profits to return them. Thus, the only possible solution is for the World Bank, IMF and UN to endorse the massive generation of money in depth lost in order to create a financial bridge from the moment it is defeated. This solution would affect employees and employers, with the following measures to be applied:
All employees who do not work should receive their full salaries through the issuance of Public Debt endorsed by the 3 agencies mentioned above, this would allow citizens to assume payment of all their expenses, food rents, mortgages, schools, clothing etc.
All companies should receive income from their payment of their monthly debts from payments to suppliers and bank loans.
This will safeguard the economic chain by preventing it from breaking, otherwise the world would enter into uncontrolled chaos, with dramatic and unpredictable consequences. Once the disease has expired, the Public Debt must be eliminated, so that the situation would be overcome without leaving future collateral damage.
We have seen how the authorities of the affected countries, such as spain, have gone from denying the situation when the measures in China were already confinement of more than 65 million people, alluding that Spain had the best health in the world, to having to apply the state of Alert at the national level, a month later, in order to contain the expansion of the Coronavirus since in the face of an uncontrolled situation the Spanish health system , would not currently be able to cope with the disease.
It is fundamental and essential that the guidelines I have set out here be followed, since neither the ECB nor the Federal Reserve has the capacity to reverse this situation, let alone the countries separately. Only a coordinated situation, as I say through the World Bank, the IMF and the UN, will be able to stop it."
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Jorge Vendrell - World Economy Devolepment Center