A Journal of the Plague Year – A Terrible Choice

Darrell Castle talks about the war on the virus, how the world’s economies have shut down, the United States has intentionally put itself into negative GDP to fight it, and now faces a terrible choice. Transcription / Notes: A JOURNAL OF THE PLAGUE YEAR—A TERRIBLE CHOICE Hello, this is Darrell Castle with today’s Castle Report. Today is Friday, April 3, 2020, and on this Report I will be talking about the virus because nothing else is happening anywhere except the War on the Virus. The world’s economies shut down and the United States intentionally puts itself into negative GDP in an effort to slow the spread of the virus. It seems to be a World War against an enemy so small only an electron microscope can see it. Here at the Castle Household we are in day 14 of quarantine, or day 14 of Castles held hostage. I guess that means Joan and I do not have the virus although I’ve seen reports of symptoms waiting a few more days to manifest. Nevertheless, we are grateful that we and our family, as well as our law firm staff and their families, are symptom free. We continue to work in lonely isolation, however, because Caesar has decreed that our isolation must continue for another month. The family daughter continues her symptom free isolation on a small island near the bottom of the world. I wonder how long this can go on without total destruction of the American economy. The answer is not that much longer as we will see in a moment. Restaurants, bars, retail shopping, churches, whole cities shutting down as the world’s economy contracts radically. Work is not being done, wages are not being earned, and things are not being made for other people to buy. It suddenly seems to have occurred to people that without revenue neither governments nor individuals can pay their bills so perhaps the virus will bankrupt more people than it kills. In talking with people via the Internet from around the world it seems that the world is teetering on the brink of uncertainty. What will happen to us and to our countries? No one seems to know. We do know the results of uncertainty when we have seen it in the past. The great American detective Lieutenant Columbo once said, to understand something you must understand its past. So we can look at history, when we find it in pure form, and mix in a little human nature, and hopefully, out comes reality, as well as a view of what has happened in the past. People accept debt and don’t mind leverage when they have confidence of future ability to service that debt. When confidence is high, people are heavily indebted since they don’t wait to buy that new car, or that new house. When people lose confidence in the future, certainty is destroyed and they wonder; will I have a job tomorrow, will I lose the ability to meet the debt service that I have. In that case, we stop spending and circle the wagons. We go into defensive mode and perhaps contemplate what default will mean for us and our families. The result of all this is that, according to the St. Louis Federal Reserve, second quarter unemployment could reach 32% which would exceed the maximum under the Great Depression. It was 24.9% in 1933 at the peak of the depression. GDP will contract in the 1st quarter by as much as 30% for the first time in many years. According to TSA, airport passenger traffic was down 90% for the month of March. 3.2 million Americans applied for unemployment benefits two weeks ago, a record number many times over, but last week its even worse at 6.6 million. The previous high was 695,000 in 1982. The Dow Jones Industrial Average (DOW), which those in power like to use as a re-election measure, is down 34% peak to trough. Call it whatever you want, but I’m calling it the worst collapse of the American economy since the great depression. People react to all this news in different ways. Some are very nonchalant hardly paying attention at all. These folks seem to believe that the reaction of most is paranoid and way out of proportion.