By a guest author

A few days ago I read an article signed by renowned German economist Daniel Stelter. There I learned – among other things – that Italians have an astonishing private wealth of 9.900 billion euro, making Italian families far wealthier than their average German or European counterparts. That’s practically 10 trillion euro in the coffers of Italians. I guess Stelter based his assumption on official data, which do not include the untold amounts of cash stashed away by thrifty Italians – especially older ones – who don’t trust banks and therefore keep their money in nooks and crannies. We know this by the amounts of worthless lire that still keep surfacing in homes where old folks pass away. Stelter’s inference is plain to see: why should the rest of the EU help Italy when Italy can clearly help herself with the money held by her citizens?

I kept on meditating about Stelter’s article as I was waiting for my turn, sitting – well distanced from others and wearing my mask – in a hall of a charity. I ended up in this place following instructions from the operator who answered the phone from the city office in charge of handling requests for aid. I thought I had to fill out some sort of forms stating that I had lost my job due to the current situation and had no other financial resources. None of that was needed as it turns out that the only thing city offices are actually doing – at least in a case like mine – is to send people to different charity organizations and, once there, “explain” why they were asking for food, practically reducing all of us – until now “normal” citizens with an income – to the humiliating status of beggars.

According to Stelter’s data – and simple math – I would be entitled, based on Italy’s current population of 60 million people, to the amount of approximately 166.000 euro, give or take a few cents. That would be like winning at the lottery to me. Since I have never seen such an amount of money, I wondered what went wrong. Actually, the first thing that came to mind while I was reading the article, by association of ideas, was a crude Neapolitan saying which, roughly translated, calls a wise guy someone who – while pretending to cry – engages in a sexual act. The Neapolitan language is unrivalled in its power of expression, which by the way reflects the local philosophy of life.
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Perhaps for want of a more suitable object President Donald Trump has vented his anger on the World Health Organization, announcing that the United States is withdrawing its financial support because of the latter’s mishandling of the so called pandemic. The progressive world is enraged. All hell broke loose and the American head of state received his portion of flak. How inhuman, how selfish, how abominable!

The United States contributed in total the whereabouts of 400 million dollars in 2018 or 16% in round numbers for the biennium of 2018-2019.In order to have an idea of how much that is, we need to bear in mind that the WHO is also financed by entities other than states: non-governmental organizations, of which the Bill and Melinda Gates Foundation according to the same sources contributed within the corresponding periods in round numbers 380 million dollars or almost 10%. GAVI Alliance contributes a little less than the United Kingdom but more than Germany. There are other private benefactors, like Rotary International or the Rockefeller Foundation.

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What is social distancing? A handy political construct. What do you do when you rule over a country, nay, over a number of countries, grouped in political blocs, and you are notified by your services that resistance is growing? that opposition is gaining in popularity? that social order is threatened? that the racial minorities that you and the likes of you have imported rather than assimilating are going to be at the throats of their hosts? What do you do when you are informed that people are boldly taking to the streets and demanding change? that there are players who are ready to topple you and your comrades, to wrench power from your hands and – what’s worst – are going to bring you to book?

You are not going to impose martial law because it somehow does not look civil in a world that has been inebriated on the infinite, never-ending, always expanding range of human rights; in a world where people have been taught to associate such measures with regimes – i.e. those governments run by tyrants in far-off lands – but not with developed democracies that are paragons of civil virtue? Besides, imposing such drastic measures draws a clear line of us against them and as a rule adds fuel to the fire of resistance. Under such circumstances, if obedience can be counted on, then merely negative obedience.

To save the day you need to come up with a solution that is going to be innocuous and that will compel people to identify with it. What do people in affluent societies care most about? About their well-being. What is their well-being conditioned by? By good health, of course, because without it you cannot enjoy the pleasures of the flesh. Hence, if an individual’s good health can be put at risk, his whole world is threatened.

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Guest author: C. van Rijn

The Corona crisis is one of the biggest problems humanity has had to deal with in a long time. People are dying in great numbers and radical measures are being taken amid this panic and maybe even mass hysteria. It is often said that human life has no price. And yet, human life has a price. This price is determined on a daily basis by health care systems using the incremental cost-effectiveness ratio (ICER). Usually, countries in Europe are willing to pay in between €20.000-€100.000 to extend a person’s life for a year. On the basis of the concept of quality adjusted life years (QALY) it is calculated whether a person with cancer is still entitled to immunotherapy or whether an older person is still entitled to a heart transplant.
To calculate whether the current measures are worth their money, we are going to estimate the gain in life expectancy resulting from the lockdown and compare it with the costs.

To this end we need to know a few things:
a) total costs of the lockdown;
b) how many years of life are likely to be lost without the lockdown;
c) how many years of life are lost even with a well-executed lockdown;
d) how many years of life are likely to be lost as a negative side effect of the lockdown;
The costs per year of life gained by the lockdown are then: a/ (b- c -d).

These calculations seem easy, but they are quite complicated. As an example we take the Netherlands and operate partly on precise numbers, partly on rough estimates. The findings can be extrapolated and applied to any other country.

First the cost. The economic loss according to CPB estimates stands at 1.2-7.7% and that calculated by the IMF at 7.5%. This means in total about €8 billion to €50 billion.
To calculate how many years of life are lost without the lockdown, we need to know the crude mortality rate (CMR) and the infection fatality rate (IFR). Until now, attention has only been focused on the Case Fatality Rate.
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We are witnessing the greatest transformation in the oil market in history.

What was recently political fiction has become reality: Saudi Arabia, the US and Russia are on the same side. After long negotiations, the largest producers of the black gold agreed to drastically reduce extraction. The limitation of the produced quantities by 20 million barrels per day (according to Trump) means a 20% lower supply (every day a total of 100 million barrels are offered in the world). Although many investors still see no reason for a rapid increase in WTI and Brent (two main types of oil), as world demand has fallen by 25 million barrels due to the so-called pandemic, the determination of the global players should be a warning to the bears on the market. The most likely scenario for most members of the new giant cartel (which also includes Canada, Mexico, Brazil, Kazakhstan and Azerbaijan) is price stabilization between 60 and 70 dollars per barrel. If prices are higher, they are more likely to counteract this, as it would encourage an acceleration of the introduction of massive e-mobility, which would not play into their hands. You can find more about commodities, which will soon be an attractive investment, in our next Bulletin No. 43.

Yesterday (March 25, 2020), Vladimir Putin held a televised speech addressed to the citizens of the Russian Federation, occasioned by the emergence of the coronavirus worldwide epidemic. He talked about the unfolding events that have hit Europe and the United States and announced a number of measures that the government was engaged in, combating the biological threat. During the whole coming week all professional activities are to be suspended while citizens will be secured with money from the state and a number of tax exemptions. A speech like any other that might be held by any leader of any state under the circumstances. There was, however, something that distinguished this address from similar speeches.

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Towards the end of his appearance President Putin announced an important fiscal initiative: recipients of dividends earned in Russia will have to pay a 15% tax (rather than the 2% as binding at present) if they intend to transfer the money abroad. Consider that the income tax in Russia amounts to 13%. With this measure President Putin is doing away with yet another yoke that was put on Russia during the Yeltsin era. With this proposal of a legislative bill President Putin will put a stop to capital flight. Surely, the moment for such an announcement was carefully selected: who during the time of the worldwide pandemic, as the current events are referred to, will dare to oppose the move?

President Putin also announced that Russia would renegotiate with other countries agreements on double taxation and in case those other countries did not yield to Moscow’s demands, Russia will unilaterally renege on those agreements.

Consider also that President Putin can kill two birds with one stone. Capital will be kept within the country and the same measure will affect the oligarchs and their Western partners. There will be less money to line the pockets of foreign investors, less credited to foreign bank accounts, less money for subversive political activities in Russia and – what follows naturally – a resultant more intense – let us express it in mild terms – dislike for the Kremlin “regime”, voiced in unison at home and abroad. Also, since almost every action is like a double-edged sword, there might be smaller foreign investment in Russia.