My advice is better to be safe than sorry

Mar 05, 2020 Letters

DEAR EDITOR,

The Coronavirus spreading globally caused the US Federal Reserve to lower interest on 3 March 2020 by 0.5 %. This was to help the economy and stock market. Ironically, it had the reverse effect.
The broader S&P 500 (SPX) closed 2.8% lower, only a day after the index logged its best day in more than two years. The Nasdaq Composite (COMP) closed nearly 3% lower. This reminds me of 1929, but it is China not the US who is the central player.
In 1929 the US was the world’s cheapest producer of goods in agriculture and the factory of the world. In the 1930s the Great Depression occurred.
The Coronavirus has pulverized the automotive sector in China, Germany, South Korea, and the rest of the world. The automotive industry is the heart of industrial manufacturing. This phenomenon has affected computer production, luxury goods and every aspect of the global supply chain. This is affecting tourism, which is about 8% of Guyana’s GDP, globally. Australia is losing about 1 billion a month because of cancelled flights.
My advice is better to be safe than sorry. The Central Bank of Guyana should buy gold for foreign reserves. Prepare for a global recession or depression; my calculus says there is a 70 % chance within the next 10 months.
Yours Truly,
Brian E Plummer

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