The Permanent Emergency: More Needless Pain on Australians

Dear Reader,

It’s always darkest before the dawn. Isn’t that the saying? If it’s true, then it’s a good job the winter solstice has come and gone in Australia. The point at which the sun reaches its most northerly point relative to the equator means it’s a short day. A dark day.

Looking at the headlines, it sure does feel dark. Victoria’s Daniel Andrews is talking about reimposing lockdown in Australia’s second largest state. Someone — probably the Communist Party of China — appears to be engaged in a giant hacking attack on Australia. And it’s taken stimulus equal to one-fifth of the world’s GDP to prevent the c-virus from plunging the world in a second Great Depression (so far).

Let’s start with the particular and move to the general. First, did you know Australia has only 585 ‘active cases’ of coronavirus? There have been 7,461 total cases, according to the Federal government’s Department of Health. The latest figures show that 6,896 people have recovered. Hmmm.

But wait. There’s more. How many people are in Intensive Care Units in Australia due to coronavirus right now? According to the Federal government, exactly two. And how many people are in hospital due to coronavirus? Exactly 15.

That doesn’t seem like much of a pandemic. And according to the government’s own numbers, the vast majority of the 102 fatalities due to the virus have been in those over the age of 60 years old. In other words, the virus is extremely dangerous for anyone who is older, obese, has existing respiratory conditions, or other comorbidities.


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Melbourne labelled a virus ‘hot spot’

Yet a full-out assault on the entire economy, led by state and local politicians continues. A look at the headlines overnight and you can see that Australia’s going tribal (and bonkers) in its c-virus responses. Queensland’s government has labelled all of Melbourne a virus ‘hot spot’. South Australia is reconsidering its plan on opening up the border with neighbouring Victoria. All this after an apparent spike in new c-virus cases in Victoria.

In response to the recent ‘spike’, Victoria’s Premier has extended the ‘state of emergency’ until 20 July. Previously expanded limits on the number of people in your home or in public gatherings, cafes, pubs, cinemas, and gyms have been rolled back. Small businesses that staffed and prepared for relaxed restrictions today will have to burn cash, wait, and hope the politicians change their mind.

There’s no doubt the virus is real. And there’s no doubt it’s dangerous for some people more than others. And it’s common sense we should all do our best to protect those most vulnerable to the virus. But a second lockdown that will put millions more people on the unemployment roles and be a final death blow for many small businesses is surely NOT the answer.

What’s also clear now — at least to some of us — is that the coronavirus has become a pretext for an all-out assault on small business, free enterprise and individual liberty. In place of that system, you’ll have permission-based living and working, where government bureaucrats decide when you can work, how much you can make and how and when you can socialise with your family, friends or even strangers (freedom of assembly and public gathering).

Restrictions will continue until a vaccine is found

If you think I’m exaggerating, ask Deputy Chief Medical Officer Nick Coatsworth. He said restrictions (on work, family, religion, public assembly) would continue until a vaccine for the virus is found. This isn’t ‘flattening the curve’ to stop the spread of the virus so we can get back to normal. This is permanent lockdown until the virus is crushed, which of course is not even possible.

What about the next virus from a Chinese wet market (or bioweapons lab)? What about the next natural disaster? What about the next public emergency that requires the suspension of normal commerce, of normal family gatherings, of church services, of basic individual rights and civil liberties it took hundreds of years to establish and enshrine in the Western legal system?

‘Too bad! None of it matters! It’s a crisis! Quit being selfish! Shut up and stay home and watch Netflix you would-be murdering, beer-swilling libertine!’

Meanwhile, another 227,000 jobs were lost between April and May, according to the Australian Bureau of Statistics. The unemployment rates increased from 6.4% to 7.1%. The ‘underutilisation rate’ — which is a combination of the unemployment rate and the underemployment rate — is 20.2%. And the labour force participation rate — a measure how many people are working who CAN work — fell to a 19-year low of 62.9%.

All of this would be normal if this were just a case of Australia’s first recession in 30 years. But it’s not normal. At least not to the extent that it’s caused by the government’s draconian response to a public health crisis. Yet here we are, on the verge of inflicting more needless pain on the vast majority of Australians.

If you want to talk about a real and long-lasting crisis, try an economy where young people can’t go to work, are saddled with debt, can’t buy a house and are robbed (by their government) of the basic opportunity to improve their lives through hard work and enterprise. Imagine turning a whole generation of Australians into wards of the state, dependent on the handouts of governments who are borrowing from the future the same money they’re so generously giving out in the present.

It’s like we’ve entered an era of mass delusions, hallucinations and erratic behavior. And to top it all off, the Chinese communists are stirring the pot.

Australia under cyber-attack

Australia has come under a massive and coordinated cyber-attack in recent months, according to news reports over the weekend.

It’s not clear if these ‘hacks’ were designed to steal sensitive data or simply probe for weaknesses in Australia’s government and private sector computer networks. Probably both.

It’s possible that these distributed denial of service (DDOS) attacks are seen as punishment dished out by China for Australia’s support of an independent inquiry into the origins of coronavirus, as well as Australian support for US/UK positions on Hong Kong and Chinese expansion in the South China Sea.

China’s communists are letting Australia know that future economic partnership comes with political strings (of course this is also true of Australia’s partnership with the US deep state…but the strings are different). And how are markets dealing with all this? By becoming more addicted to credit.

Bank of America analysts reckon there’s been $18.4 trillion in ‘stimulus’ in 2020 to deal with the pandemic/depression. $10.4 trillion of that is ‘fiscal stimulus’ or government spending and direct handouts. The other $8 trillion is ‘monetary stimulus’ from central banks, which has mostly gone to support financial asset prices (stocks and corporate/government bonds). There have been 134 rate cuts by global central banks, this year alone!

Take away the $18 trillion punch bowl, add in a global depression and you have a potent mix for much lower stock prices. Only the dulled senses and credit-addled brains of investors have yet to see that. But they will see the light soon. It’s dark now. But the fires of inflation are going to light everything up soon enough.


Dan Denning,
Editor, The Rum Rebellion

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Dan Denning is the co-author of The Bonner-Denning Letter.

Dan was a founder of Port Phillip Publishing back in 2005, which quickly became the leading publisher of its kind for independent financial research and insights. In 2014 he left to head up Southbank Investment Research in the UK. Dan is also the author of the 2005 book, The Bull Hunter. Today, he’s based in his home state of Colorado. Each Monday in The Rum Rebellion you’ll get Dan’s unique contrarian thinking to provide insights you won’t find anywhere else.

Dan Denning’s belief in free markets, sound money, personal liberty, and small government have underpinned everything he’s done during his 23 years in the financial publishing industry.

The Rum Rebellion