CHINA - Whoever came up with the idea of the global village clearly never thought about how a disaster in one part of the village would affect all the other residents. The 2008 global financial crisis is a prime example of why interconnecting the entire planet’s financial health is a seriously bad idea. Depreciation in the subprime mortgage market in the United States resulted in the collapse of investment bank Lehman Brothers, and like a series of dominoes, one bank after the other around the world started failing.
The crisis that followed, now known as the Great Recession, created economic havoc across the globe, and it took years for the world’s economy to regain some semblance of balance. Now, another global economic disaster could be looming, this time because of the microscopic coronavirus known as Covid-19, which has infected over 72,000 people and claimed more than 2,000 lives in just a few weeks. Of course, the primary focus of the media has been on the spread of the disease and what measures different countries have put in place to contain it.
There is widespread fear that Covid-19 could eventually become a global pandemic that claims millions of lives. But this virus has the potential to be devastating in another way, too: It could result in a global economic meltdown and could severely impact the availability and cost of thousands of essential products from China.