Corona Virus Conversations (VERMONT FRONTIER – OPEN THREAD)

Publisher’s Note: After weeks of reading and conversation, we are opening this thread on the CV19 situation to post the most provocative and helpful links we’ve discovered. Feel free to send on others to publisher@vermontindependent.net. Wash your hands, breathe, meditate, and build more resilient minds and bodies!

Begin with a helpful conversational exchange on Facebook with Vermonter and public health professional Jess Hobart, now living in London. NOTE: The UK government appears to be reversing its position on “herd immunity” exclusively, as of 3/17/2020.

The BIG question – do nations/governments aggressively move to LOCK DOWN to slow the spread of this CV19 “outbreak,” or do they let the virus run its course?

The answer – BOTH/AND this thing. See our summary of the LONDON REAL video below.

Our original post, prompted by this LONDON REAL video.

So, provocative thinking here from London Real, epidemiologically speaking…

Virus infection rates will be high. People will die. #TeamHuman needs the young, healthy and strong to “adopt” the virus and build “herd immunity” over time, AND we need to do our best to protect the older and most vulnerable among us. Isolate. Test. This whole process will unfold as a multiyear phenomenon. Needless to say, this doesn’t play well on the TeeVee. What are other big picture strategies?

Jess provided this brilliant multi-variant analysis:

Nobody knows anything for sure, of course. What we have to go on so far is data from past experience in this outbreak and in previous pandemics, and expectations about the time it will take to find treatments and vaccines. The reasonable people think it will take 12-18 months at least for a vaccine to be tested and produced on a large enough scale for it to be useful– and that assumes that one is found that is safe and effective. In the meantime, we will also get better at treating people who have the most serious reactions. So far there are at least several trials going on for using anti-viral approaches and drugs meant to specifically target the cytokine storm. All of that is good. Because there is some hope in sight that we will get better at saving people, there is a good argument, in my view, for trying to slow down the spread. We know what seems to be working, from the data coming from China, S. Korea (edited to add Hong Kong and Taiwan, too) and Singapore. (Japan isn’t doing much testing, so we don’t actually know if their social distancing is working, so I don’t think their data is helpful.) What is distinctive in China is not just that they put people on lockdown, but that they segregated patients from healthy folks to avoid spread within families as well– so that’s a step beyond the social distancing that’s being talked about in the US and in Europe. What’s distinctive in S. Korea is the widespread testing, that’s allowing them to track contacts and identify people at risk of spreading. (I don’t actually know if they are then segregating folks or whether it’s just being used to have people stay apart at home). In Singapore they have been very aggressively enforcing self isolation– which is more possible in a small state that is wired in all ways (including a more compliant population) to enforce it. None of this is easy, and human behaviour and the culture in question has to be taken into account.

Leaders have to take into account human behaviour, economic consequences, the ethical questions, and the science. And that’s putting aside the political preferences. The science, to me, says isolate and delay while we get better at treatment and look for a vaccine. The economists, in the short term, would like to keep the engine running– but that may mean the long term consequences are more challenging because there is no such thing as actually getting it over with quickly without isolation, and if the whole workforce is under the weather at once you’re not keeping on. From an ethical standpoint– if you accept that by creating herd immunity, in the short term you’re increasing risk to the vulnerable, then you have to weigh that against the long term risk to the future vulnerable population. We’re not so good at making those kinds of choices that favour current risk over future safety– but even so, accepting that we will get better at treatment and may have a vaccine in future, ethically we’re weighing current higher risk against future less high risk so not equivalent. Then there’s the human behaviour element. The UK is betting that people won’t be very compliant when they ask them to self-isolate, and that they should delay the isolation because people won’t do it for long. Which is why they seem to be using the argument for herd immunity, to justify keeping the economy ticking along until just before the NHS is completely overwhelmed and they need to begin making the difficult decisions about who gets the ventilators.

Data I’ve seen suggest that 88% of deaths are from people who are over 70. Which means that 12% are from people under 70, some of whom have no obvious underlying condition to put them at risk. (Haven’t seen data on how many are in this last category). A strategy that encouraged younger people to get it intentionally to build herd immunity would certainly result in some of those people getting complications– which then block a ventilator for weeks on end whereas if they’d self-isolated they might have avoided blocking a space.

As someone with increased risk of a cytokine storm, I personally would like to delay getting it until we get better at treating it. And so far the data shows that countries that are testing and isolating cases are doing best at controlling it. I’m not too keen to be part of a natural experiment that tests the herd immunity strategy here without my consent.

Test. Isolate. Treat when necessary. Because that’s what we have data to show has worked best so far.

Other helpful and provocative links:

CV19/U Student’s POV: Daughter Anneka Williams from Bhutan on COVID-19 and Globalization.

CV19/Fiat Currencies and Central Banking: Hold on to your hats, folks.

CV19/TIMELINE: Helpful timeline from Ontario’s Centre for Research On Globalization.

CV19/CoronaVirus As A Weapon Of War, courtesy of the WSWS news wire.

CV19/COG (Continuity Of Government) and Potential Martial Law: Part time Vermonter and US intelligence journalist William Arkin in Newsweek.

CV19/Considering this virus as a bioweapon, courtesy of Zero Hedge.

CV19/Russians Will Use Virus To “Sow US Election Year 2020 Discord?” Surprise! Not. The New York Times Asks This Ridic Question, at THE SAME TIME as the US government quietly drops the “RussiaHackedThe2016Election” legal case against the IRA.

CV19/US Economy: Financial journalist Dylan Ratigan on Italy, public health, economic stimulus, UBI, field hospitals, and testing.

CV19/US versus China Empires and “BioWar” – Deep Dive. Wow.

CV19/Vaccines and Public Health History: Credible research here, as recommended by NYU colleague Mark Crispin Miller. See his context here, below.

CV19/Reality Check: Corona Virus: Fear versus Reality, courtesy of futurist Peter Diamandis.

CV19/Leadership: Corona Virus: What Science Says Leaders Should Do, thanks to the NeuroLeadership Institute.

CV19/US Politics: As Reuters originally reported, the US government “outsourced” our public health To The “Deep State” – thanks to Mint Press for this important story. And more here going back eight years.

CV19/Epidemiology: Dr. Wolfgang Wodarg on the “corona panic” and the political processes at work that “completely exceeded the virological frame.”

CV19/Epidemiology: Joe Rogan Talks With Epidemiological Expert Michael Osterholm.

CV19/Global Geopolitics: Is the “Corona Virus” Really “Economic Warfare”? and did CV19 actually originate in the United States? sent to us by a thoughtful Vermonter, courtesy of the Centre for Research on Globalization.

CV19/Big Pharma-Vaccines: Beware “forced injection” programs in “times of crisis.” Here’s “The Highwire’s” Del Bigtree on the vaccine connection. And CV19 “vaccine trials” are now RAPIDLY underway.

CV19/High Octane Speculation/”Conspiracy Theory”: Is The “Corona Virus” Pandemic Fake? – sent to us by a thoughtful Vermonter. Whoa. A good reminder to critically question ANY and ALL “news” sources.

CV19/And Event 201 – High Level “Pandemic” Simulation from October 2019, courtesy of Canadian researcher Cory Morningstar.
The fictional pandemic exercise titled Event 201 was a high level simulation exercise that took place on October 18, 2019, at the Pierre luxury Hotel in Manhattan NY. High-level global participants gathered to explore ideas as to how to mitigate devastating worldwide economic and societal impacts that would result from “a severe, highly transmissible intercontinental outbreak”. The exercise was built around a fictionalized CAPS virus, a naturally occurring coronavirus (not unlike SARS or MERS) which originated in bats, but for the fictional exercise, it had emerged from pigs.

The event was held by Johns Hopkins Center for Health Security, in partnership with the World Economic Forum and the Bill & Melinda Gates Foundation.

Event 201 was by invitation only, with media in attendance such as Bloomberg. Video and audio recording were not permitted, rather, following the event, select high-quality video and audio were made available to the press in attendance.

The sixteen high-level participants included Ryan Morhard, Lead, Global Health Security, International Organizations, and *IGWELS, World Economic Forum, Chris Elias, President, Global Development division, Gates Foundation, Tim Evans, Former Senior Director of Health, World Bank Group, and Avril Haines, Former Deputy Director, Central Intelligence Agency; Former Deputy National Security Advisor.

[*IGWELS is an acronym recognized to few outside the power elite – the “Informal Gatherings of World Economic Leaders”. These are the very top-tier closed meetings “restricted to the likes of prime ministers, foreign and finance ministers and central bank governors”.]

Other high-level participants/experts included CEOs/ representatives of the UN Foundation, US Centre for Disease Control, Chinese Center for Disease Control and Prevention, Johnson & Johnson, ANZ Bank, Lufthansa Group Airlines, NBCUniversal Media, Nigeria Centre for Disease Control, UPS Foundation, Edelman (one of the largest PR/marketing consultancy firms in the world, in fees/ revenue), Henry Schein, Inc. (a worldwide distributor of medical and dental supplies including vaccines, pharmaceuticals, financial services and equipment), Marriott, and the Monetary Authority of Singapore.

A primary purpose for the simulation was to illustrate the weakening of international alliances (and the potential of collapsing Governments) – thus, putting forward a shared fervour to increase public-private partnerships. While the high-level participants recognized the public sector as the front line of defence against pandemics, they highlighted their shared position that the resources and strength/ability to respond exist/belong to those in the private sector.

“Creating models such as Event 201 takes more than a year of planning, and an investment of “hundreds of thousands of dollars”, [Ryan Morhard, project lead for Global Health Security, World Economic Forum], but the lessons learned are invaluable.”

Thirty days after the October 18, 2019 simulation exercise, on November 17, 2019, the first documented case of the coronas virus (COVID-19) is said to have appeared. [“The first case of someone suffering from Covid-19 can be traced back to 17 November, according to media reports on unpublished Chinese government data.] [Source: The Guardian]

Logic dictates that the simulation drill carried out on a fictitious corona virus global pandemic, which was then declared a global pandemic on March 11, 2020 by the WHO, is a drill worthy of both study and analysis. Of particular interest are the discussions on how to control the messaging.

Here it is important to note that also on March 11, 2020, the World Economic Forum announced a partnered with the WHO (an UN agency) to form the COVID-19 Action Platform – a task-force comprised of over 200 corporations at launch. This is in addition to the World Economic Forum partnership with the United Nations on June 13, 2019. The corporate world is capturing our real world, in real time.

The videos which remain accessible on the website include: Highlights Reel – Selected moments from the October 18th Event 201 Exercise (Length: ~12 minutes); Segment 1 – Intro and Medical Countermeasures (MCM) Discussion; Segment 2 – Trade & Travel Discussion; Segment 3 – Finance Discussion; Segment 4 – Communications Discussion and Epilogue Video; Segment 5 – Hotwash and Conclusion

[Website: www.centerforhealthsecurity.org/event201]

You can listen to the two separate Bloomberg reports here:

Bloomberg, Nov 4, 2019: Preparing For The Next Pandemic (Audio): “As the coronavirus outbreak approaches a pandemic, global leaders and health officials are scrambling to contain the fallout. That has sparked quarantines and other emergency action around the world. It’s a scenario that was planned for, in one case just months ago, at a gathering of leaders in global finance, policy and healthcare. Bloomberg’s Janet Wu was there and brings us this report.” [Running time 08:12]

Bloomberg, March 4, 2020: Event 201: Preparing for a Pandemic (Audio)

Hosts June Grasso and Ed Baxter feature the best stories of the day from Bloomberg Radio, Bloomberg Television, and over 120 Bloomberg News bureaus around the world on Bloomberg Radio’s Bloomberg Best. Highlights include… Janet Wu on the potential impact of the next Pandemic. [21:33-29:33]

CV19/Economics: Public Bank expert Ellen Brown on the Federal Reserve versus Chinese banks – below.

The Fed’s Baffling Response to the Coronavirus Explained

When the World Health Organization announced on February 24^th that it was time to prepare for a global pandemic, the stock market plummeted. Over the following week, the Dow Jones Industrial Average dropped by more than 3,500 points or over 10%. In an attempt to contain the damage, on March 3^rd the Federal Reserve slashed the fed funds rate from 1.5% to 1.0%, in their first emergency rate move and biggest one-time cut since the 2008 financial crisis. But rather than reassuring investors, the move fueled another panic sell-off. 

Exasperated commentators on CNBC wondered what the Fed was thinking. They said a half point rate cut would not stop the spread of the coronavirus or fix the broken Chinese supply chains that are driving US companies to the brink. A new report by corporate data analytics firm Dun & Bradstreet calculates that some 51,000 companies around the world have one or more direct suppliers in Wuhan, the epicenter of the virus. At least 5 million companies globally have one or more tier-two suppliers in the region, meaning their suppliers get their supplies there; and 938 of the Fortune 1000 companies have tier-one or tier-two suppliers there. Moreover, fully 80% of US pharmaceuticals are made in China. A break in the supply chain can grind businesses to a halt. 

So what was the Fed’s reasoning in lowering the fed funds rate? According to some financial analysts, the fire it was trying to put out was actually in the repo market, where the Fed has lost control despite its emergency measures of the last six months. Repo market transactions come to $1 trillion to $2.2 trillion per day and keep our modern-day financial system afloat. But before getting into developments there, here is a recap of the repo action since 2008.  

Repos and the Fed

Before the 2008 banking crisis, banks in need of liquidity borrowed excess reserves from each other in the fed funds market. But after 2008, banks were reluctant to lend in that unsecured market, because they did not trust their counterparties to have the money to pay up. Banks desperate for funds could borrow at the Fed’s discount window, but it carried a stigma. It signaled that the bank must be in distress, since other banks were not willing to lend to it at a reasonable rate. So banks turned instead to the private repo market, which is anonymous and is secured with collateral (Treasuries and other acceptable securities). Repo trades, although technically “sales and repurchases” of collateral, are in effect secured short-term loans, usually repayable the next day or in two weeks. 

The risky element of these apparently-secure trades is that the collateral itself may not be reliable, since it may be subject to more than one claim. For example, it may have been acquired in a swap with another party for securitized auto loans or other shaky assets – a swap that will have to be reversed at maturity. As explained in an earlier article here, the private repo market has been invaded by hedge funds, which are highly leveraged and risky; so risk-averse money market funds and other institutional lenders have been withdrawing from that market. 

When the normally low repo interest rate shot up to 10 percent in September, the Fed therefore felt compelled to step in. The action it took was to restart its former practice of injecting money short-term through its own repo agreements with its primary dealers, which then lent to banks and other players. On March 3^rd, however, even that central bank facility was oversubscribed, with far more demand for loans than the subscription limit.

The Fed’s March 3^rd emergency rate cut was in response to that crisis. Lowering the fed funds rate by half a percentage point was supposed to relieve the pressure on the central bank’s repo facility by encouraging banks to lend to each other. But the rate cut had virtually no effect, and the central bank’s repo facility continued to be oversubscribed the next day and the next. As observed in a March 5^th article on Zero Hedge:

This continuing liquidity crunch is bizarre, as it means that not only did the rate cut not unlock additional funding, it actually made the problem worse, and now banks and dealers are telegraphing that they need not only more repo buffer but likely an expansion of QE… 

The Collateral Problem

As financial analyst George Gammon explains, the crunch in the private repo market is not actually due to a shortage of liquidity. Banks still have $1.5 trillion in excess reserves in their accounts with the Fed, stockpiled after multiple rounds of quantitative easing. The problem is in the collateral, which lenders no longer trust. Lowering the fed funds rate did not relieve the pressure on the Fed’s repo facility for obvious reasons: banks that are not willing to take the risk of lending to each other unsecured at 1.5 percent in the fed funds market are going to be even less willing to lend at 1 percent. They can earn that much just by leaving their excess reserves at the safe, secure Fed, drawing on the Interest on Excess Reserves it has been doling out ever since the 2008 crisis. 

But surely the Fed knew that. So why lower the fed funds rate? Perhaps because they had to do something to maintain the façade of being in control, and lowering the interest rate was the most acceptable tool they had. The alternative would be another round of quantitative easing, but the Fed has so far denied entertaining that controversial alternative. Those protests aside, QE is probably next on the agenda after the Fed’s orthodox tools fail, as the Zero Hedge author notes. 

The central bank has become the only game in town, and its hammer keeps missing the nail. A recession caused by a massive disruption in supply chains cannot be fixed through central-bank monetary easing alone. Monetary policy is a tool designed to deal with “demand” – the amount of money competing for goods and services, driving prices up. To fix a supply-side problem, monetary policy needs to be combined with fiscal policy, which means Congress and the Fed need to work together. There are successful contemporary models for this, and the best are in China and Japan.

The Chinese Stock Market Has Held Its Ground

While US markets were crashing, the Chinese stock market actually went up by 10 percent in February. How could that be? China is the country hardest hit by the disruptive COVID-19 virus, yet investors are evidently confident that it will prevail against the virus and market threats. 

In 2008, China beat the global financial crisis by pouring massive amounts of money into infrastructure, and that is apparently the policy it is pursuing now. Five hundred billion dollars in infrastructure projects have already been proposed for 2020 – nearly as much as was invested in the country’s huge stimulus program after 2008. The newly injected money will go into the pockets of laborers and suppliers, who will spend it on consumer goods, prompting producers to produce more goods and services, increasing productivity and jobs. 

How will all this stimulus be funded? In the past China has simply borrowed from its own state-owned banks, which can create money as deposits on their books, just as all depository banks can today. (See here and here.) Most of the loans will be repaid with the profits from the infrastructure they create; and those that are not can be written off or carried on the books or moved off balance sheet. The Chinese government is the regulator of its banks, and rather than putting its insolvent banks and businesses into bankruptcy, its usual practice is to let non-performing loans just pile up on bank balance sheets. The newly-created money that was not repaid adds to the money supply, but no harm is done to the consumer economy, which actually needs regular injections of new money to fill the gap between debt and the money available to repay it. As in all systems in which banks create the principal but not the interest due on loans, this gap continually widens, requiring continual infusions of new money to fill the breach. (See my earlier article here.) In the last 20 years, China’s money supply has increased by 2,000 percent without driving up the consumer price index, which has averaged around 2 percent during those two decades. Supply has gone up with demand, keeping prices stable. 

The Japanese Model

China’s experiences are instructive, but borrowing from the government’s own banks cannot be done in the US, since our banks have not been nationalized and our central bank is considered to be independent of government control. The Fed cannot pour money directly into infrastructure but is limited to buying bonds from its primary dealers on the open market.

At least, that is the Fed’s argument; but the Federal Reserve Act allows it to make three-month infrastructure loans to states, and these could be rolled over for extended periods thereafter. The repo market itself consists of short-term loans continually rolled over. If hedge funds can borrow at 1.5 percent in the private repo market, which is now backstopped by the Fed, states should get those low rates as well. 

Alternatively, Congress could amend the Federal Reserve Act to allow it to work with the central bank in funding infrastructure and other national projects, following the path successfully blazed by Japan. Under Japanese banking law, the central bank must cooperate closely with the Ministry of Finance in setting policy. Unlike in the US, Japan’s prime minister can negotiate with the head of its central bank to buy the government’s bonds, ensuring that the bonds will be turned into new money that will stimulate domestic economic growth; and if the bonds are continually rolled over, this debt need never be repaid. 

The Bank of Japan has already “monetized” nearly 50% of the government’s debt in this way, and it has pulled this feat off without driving up consumer prices. In fact Japan’s inflation rate remains stubbornly below the BOJ’s 2% target. Deflation continues to be a greater concern than inflation in Japan, despite unprecedented debt monetization by its central bank.    

The “Independent” Federal Reserve Is Obsolete

In the face of a recession caused by massive supply-chain disruption, the US central bank has shown itself to be impotent. Congress needs to take a lesson from Japan and modify US banking law to allow it to work with the central bank in getting the wheels of production turning again. The next time the country’s largest banks become insolvent, rather than bailing them out it should nationalize them. The banks could then be used to fund infrastructure and other government projects to stimulate the economy, following the model of China.   

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This article was first posted on Truthdig.com. Ellen Brown chairs the Public Banking Institute and has written thirteen books, including her latest, Banking on the People: Democratizing Money in the Digital Age.  She also co-hosts a radio program on PRN.FM called “It’s Our Money.” Her 300+ blog articles are posted at EllenBrown.com