The spread of the COVID-19 around the world and the country-wide shutdowns it’s caused has changed the world.

Coronavirus is a modern pandemic the like of which the world has never seen—in its spread through a globalized, connected world; in the scale of government’s response, and in how people are reacting on social media.

The economic consequences of the lockdowns put in place to try to contain the spread of the coronavirus will stretch well into this century and the way money is created, distributed and spent will, for better or worse, never be the same.

Coronavirus has now been found in around 1.3 million people around the world, with millions more thought to be carrying the virus, and deaths from COVID-19 are approaching 70,000 globally.

New York state has more than 122,000 confirmed coronavirus cases—about a third of all the cases in the U.S. and has, along with California, led the country in imposing statewide lockdowns, asking people to stay home unless necessary.

More than half of U.S. states have now imposed strict lockdown measures, forcing thousands of businesses to close indefinitely, seriously disrupting the lives of over 100 million people, and making record numbers unemployed.

The U.S. unemployment rate could rise to more than 32% over the next three months as more than 47 million Americans lose their jobs, economists at the Federal Reserve warned last week.

Late last month, U.S. president Donald Trump signed a $2 trillion emergency relief package to try to offset the economic devastation wrought by the coronavirus pandemic, marking the biggest rescue deal of its kind in U.S. history.

Every American earning less than $75,000 per year will pick up a one off payment of $1,200, as well as $500 per child.

Meanwhile, the U.S. Federal Reserve has aimed a $4 trillion dollar bazooka at the U.S. economy, pumping over $1 trillion to the system in recent weeks with its chair, Jerome Powell, promising never-before-seen levels of money printing and so-called “quantitative easing to infinity” through an unlimited bond-buying program.

The Fed has also cut its benchmark interest rate to near zero and made sure commercial banks will continue lending to companies, cities and states. All told, the extraordinary measures are expected to grow the Fed’s balance sheet by $4.5 trillion this year—far exceeding its growth during the 2008 global financial crisis.

Eurozone finance ministers are also expected to approve fresh funding to countries wrestling with the coronavirus pandemic across the continent.

Elsewhere, financial regulators across the globe have freed up some $500 billion of capital to help lenders absorb the impact of the coronavirus COVID-19 pandemic, according to calculations made by the London-based Financial Times newspaper this weekend.

It’s hoped this will keep credit flowing despite businesses and jobs being put on pause but will roll back many of the post-financial crisis requirements put in place to prevent banks getting into similar trouble again.

Despite massive co-ordinated action from central banks and governments around the world, the global economy is on track for its sharpest, and by far quickest, slowdown since the Great Depression almost 100 years ago.

This situation, where record economic stimulus measures, combined with ongoing orders that will restrain people’s spending, do not appear in any economics text book and have never been taught at any business school. No one is quite sure what the short, medium or long term effects will be.

On top of the economic records being set and monetary policy barriers being broken, the way people are using money has changed.

Cash use has all but evaporated, something that will leave the likes of Visa and Mastercard as gatekeepers of spending.

In Britain, cash use halved in a handful of days last month as stores were shuttered and people fretted notes and coins could be transmitting the virus, the U.K.’s largest ATM operator reported.

Stores around the world, including some supermarket and grocery store chains, have opted to go card only, refusing cash. It’s a change they say is only during the coronavirus crisis but seems unlikely to ever go back to how it was before.

Plans to create a digital dollar, up until recently a distant dream of fiscally progressive think tanks, appeared on an early draft of the $2 trillion, cross-party stimulus bill before being scrubbed from the final edition—something that would revolutionize U.S. banking and fundamentally change the financial sector.

France is, meanwhile, moving ahead with trials for a digital euro.

The economic and monetary upheavals of the last month have pushed some toward scarce digital assets, such as bitcoin, and further convinced die-hard supporters that cryptocurrencies are the future.

“I haven’t seen this much organic new interest in bitcoin since early 2017 in my non-crypto circles,” a well-known crypto investor, Ari Paul, said last week via Twitter.

In 2017, the bitcoin price soared from less than $1,000 at the beginning of the year to around $20,000 in under 12 months, largely boosted by surging demand from people eager not to miss out.

Something similar could be about to happen again, though for entirely different reasons.

The Marxist revolutionary Vladimir Lenin said: “There are decades where nothing happens; and there are weeks where decades happen.”

These are those weeks.


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