Economical meldtdown because of the Virus

As of today I have been forced to close my offline business by the authorities. At the same time, the company that employs my wife had to close store. We are now at home with our two kids and are doing homeschooling because as of yesterday all schools in Switzerland are closed. All this because of the virus...

The extend of the economical catastrophe

I believe that people don't grasp the extend of the crisis that we are facing because of this virus. Most countries all around the globe are more or less in stand still. People can't work or only in special conditions. Everybody is scared and the first priority is our own survival. This means avoiding the virus and have enough food and drink to simply survive. As a first reaction we stop spending for anything but essential goods.

Companies have to face a reduced demand and at the same time more difficult production situation and even shortage of supplies for their production. This translates quickly in a situation where the business simply can't be profitable anymore.

Companies will fight for their survival

The longer this situation last, the more difficult it will become for the companies simply to survive. The costs will still be there but on the income side, things look very bad. I believe that most companies have not planned to be for a very long time without income. Small businesses will be affected first and many will bankrupt. This will leave financial holes with their suppliers, their landlords and also their employees. In the end it might create a chain reaction that will force many companies out of business. When the people don't get their salaries, they will not be able to pay their rent or their mortgage rates. This will put a strain on the banks which are interloked with all the other banks in the world. We saw what happens if banks are in trouble in 2008...

We simply face a worldwide meltdown of the economy

What can be done to avoid this?

The only solution in my eyes is to keep this lockdown as short as possible. If we all contribute to stay at home and interrupt our business we can contain the virus. The quicker we manage to do that, the easier it will be to rebuild...

My advice to all of you:

• Don't underestimate this virus and its effects on the economy

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