The Tribune

EDITOR, The Tribune.

THE Corona virus spreading globally caused the US Federal Reserve to lower interest on March 3, 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 producers of goods in agriculture and the factory of the world. In the 1930s the Great Depression occurred.

The Corona Virus has pulverised the automotive sector in China, Germany, South Korea, and the rest of the world. The automotive industry is the heart of industrial manufacturing. This phenomena has affected computer production, luxury goods and every aspect of the global supply chain. This is affecting tourism, which is about 60% of the Bahamas’ s GDP, globally. Australia is losing about one billion a month because of cancelled flights.

My advice is better to be safe than sorry. The Central Bank of the Bahamas should buy gold for foreign reserve. Prepare for a global recession or depression. My calculus says there is a 70% chance within the next 10 months.

BRIAN E PLUMMER

Nassau,

March 3, 2020.