unVeiled: The Price of Forty Days

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[[size 0.85em]]unVeiled » [# Economics][[/size]]
[[size 1.4em]]**The Price of Forty Days -- Economic Impacts of the [[[project-scarlet-dawn| Washington Viron]]]**[[/size]]

[[size 0.8em]]**By Werner Reinz (⁂Reinz)**
**Published 26/01/2050, 09:32**[[/size]]
[[image shipping.jpg width="auto" style="border: solid 1.5px #799dce;"]]

[[size 0.8em]]The shipping container, the lifeblood of the economy.[[/size]]

 
[[==]]

+ Introduction

A general rule of thumb is that you only hear about the economy when it is screwing you over. The economy has been on the news a lot in the last two years. unVeiled has asked me, Mr. Reinz, formally of Goldbacker and Reinz, now retired, to provide an overview of how exactly we got into this mess of mass global unemployment, declining real wages and significant inflation.

While the [https://scp-wiki.wikidot.com/8000-dead-rats-hub quarantine] placed on the United States of America is worth the cost to avoid the complete death of magic, this total blockade has lead to catastrophic issues rippling throughout the entire economy, from the expected to the unexpected.   

+ Disruption to bulk shipping

The first and most obvious impact of this pandemic is the near complete isolation of the United States economy. While the US is not the titan it was a hundred  years ago, it is still the center of the global economy. Initial concerns were mainly focused on the very important manufacturing goods that the US produces, mostly the machine tooling that underlies global manufacturing and the production of jet engines that allow for global transportation.


Fortunately, the [[[carter-courier-channel| Carter Courier Channel]]] has meant that high value objects have continued to flow through the global economy, despite significant friction. Reworking the vast majority of supply chains is no easy task!

However, the CCC has some significant limits in terms of mass that can be transported, while it can produce cost effectiveness on the level of freight trains, there is still no substitute for a container ship when it comes to sending vast quantities of goods. Before the pandemic, the US moved one billion tonnes of goods overseas every year.  The CCC cannot keep up with this.

Hundred of millions of tonnes of grains and soybeans are now stuck inside the United States. Tens of millions of tonnes of steel are stuck outside of it. These shock waves have spread out among the globe.

+ Famine in Africa

While the general downturn in the global economy has hit everyone, Africa is the worst affected. The USA is the second largest producer of grain in the world, after China, and one of the largest exporters, exporting over 150 million tonnes of grains per year to the 11 billion people out there.

Furthermore, the USA, with its massive oil reserves, is also one of the largest producers of fertilizers, causing prices of nitrogen fertilizers to spike. Russia has historically also been a major exporter, but has experienced severe declines in fertilizer due to significant decline under capitalization of the chemical sector in the later 2020s and 2030s.

American grain and fertilizer has been totally cut off to the wider world. As a result, global prices for wheat, rice and corn have increased by 300%. India and several other developing nations have responded to this by cutting off all grain exports. This embargo has kept grain prices lower in those countries but has also exacerbated the issue globally.

The center of these issues is in Africa, the sub-saharan miracle and the emergence of the African Lions has seen millions rise out of severe poverty into low income but stable levels of prosperity, comparable to India after the fall of the Veil.  We thought that like pestilence, the horseman of famine had been slain. However it has reared its head again with food insecurity levels not seen since the fall of the veil.

+ Failures to mobilize latent grain production  

In response to this widespread famine, Ukraine has requested certain limits on grain production imposed by the European union be lifted. As a requirement for joining the European Union, Ukraine agreed to severely limit agricultural production in a move widely seen as a handout to Polish and French farmers at the time.

Ukraine put in a request to remove these restriction for the duration of the crisis. The European Commission approved the request and drafted up legislation to allow for significant increases in grain production. The response by other European farmers was fast and brutal.   

Massive scale protests by small and medium scale farmers appeared in the capitals of several nations, most notably Warsaw and Paris. These farmers were protesting "threats to their livelihood over cheap grain" along with several xenophobic remarks.

While the bill passed the European Parliament, it was killed in the Council of Europe due to state governments backing down to the farmers. Ukrainian agriculture is still producing far less food than it could be.


+ Piracy

One of the unexpected effects of the quarantine was a global spike in piracy. With the collapse of the United Kingdom and the major demographic issues currently haunting China and Japan, the United States Navy and the French Navy are currently the only major blue water navies. With the US Navy being forced to return to port by the Coalition and suffering from extreme shortages of spare parts, the global waterways are being left unprotected.

While India, Nigeria, and the European Integrated Navy are ramping up construction of long range warships for anti-piracy operations, these ships will not come online for several years. Led by the Liberal-Democrats under Layla Moran,  the Republic of England has pledged to rebuild the Royal navy, however this project has been significantly bogged down by debates on what to rename the navy to and complaints over dockyards interfering with local sea views. In the meantime the absence of blue water navies has allowed for an explosion in piracy. Going over the key choke points in global shipping:

In the Straits of Malacca we have seen the emergence of Te Waha o Te Oka a Māui, also known as The Mouth. The history of this pirate group is fairly complicated, emerging from a nexus below what used to be Wellington, New Zealand.

One thousand years ago, a member of  [[[scp-8007|those Below the Flames]]] was somehow killed by the Maori Folk hero Maui. The creature was misidentified as a massive fish due to its lack of wings and became the myth of the founding of Aotearoa.[[footnote]]The Maori name for New Zealand.[[/footnote]]. With the arrival of the British a Nexus was formed in the creature's mouth underneath the city of Wellington, which was inhabited by a mixture of native anomalous individuals and a population of European vampires.

During the sinking of New Zealand, some of the local vampiric population proposed an emergency plan to resurrect the great fish allowing them to leave. These people had disappeared off of the map for some time before reemerging as a pirate group stalking the very busy area around Malaysia using the resurrected great fish as a mobile island base.  

Next in the Red Sea region, Somali pirates have reemerged. Despite the ongoing efforts by the Somaliland government to stabilize the region, piracy is still ongoing and is ramping up from its previous significant lows.

In the Caribbean, Haiti is continuing to have significant economic and stability problems. With the withdrawal of the US navy, Tortuga has reemerged as a center for piracy in the Caribbean and Panama region.

Within the north sea and the Northwest passage in the arctic Ocean, made navigable by the melting of the sea ice, the Pirate Republic of Hy-Brasil has developed. Almost the entire population of the former kingdom of Hy-Brasil had already left the island by 2048, allowing for a coup. The Island is using the natural defenses to provide safe harbor to ships intercepting trade from China to Europe that is passing though the north pole. Normal military action cannot be performed as the island is impossible to reach by hostile actors. The Coalition has commissioned the Abnormaliteiten Veiligheidsdienst to construct a reverse moat around Hy-Brasil using a mixture of Dutch Tulip magic, financial wizardry and the ritual cannibalism of a prime minister[[footnote]]The Dutch constitution has a provision to temporally appoint an animal to the office of prime minister for use in ritual cannibalism.[[/footnote]].  

Finally, there have been uncorroborated reports of a large sailing ship seemingly from the 1600s intercepting Spanish-flagged shipping. There are more fanciful claims that this Man O' War is being captained by a (somehow) still-living [[[scp-4918|Sir Francis Drake]]]. The British Occult Service has neither confirmed nor denied these statements.


+ Oil

While the world economy does not revolve around oil to the degree it did back in the early 21st century and is barely used as an energy source these days, oil is still a critical chemical precursor.  Due to the confluence of large scale extraction and local refining and manufacturing, the United States and Canada were the largest producers of oil in the world. However, as most of the refining of the oil and processing into chemical goods was done in the United States, the Canadian economy has been shut out of the global oil markets. Efforts are underway to reactivate old oil transportation infrastructure from Canada to the rest of the world.

Because of this isolation, global bulk plastic production has effectively fallen by 50 million tonnes. Global fertilizer exports have also fallen as per the agricultural section. Pharmaceutical compounds are being dealt with via the CCC, however there was a severe shortage of certain esoteric and vital drugs before the CCC was set up. There is also an emerging global asphalt shortage, though this is less severe.



+ Supply chain chaos

All in all, many, many links in the global economy came undone in the months after quarantine day. And the thing about supply chains, like with normal chains, when one link fails the whole thing fails. Normally, the global transport industry works behind the scenes and no one questions about how fresh pineapples show up in Canadian supermarkets.

However, when the heart of the global economy is ripped out, these questions become a lot clearer. The entirety of the global shipping industry basically had to rewrite everything after the quarantine, because now there are a lot of goods heading to the US that are no longer allowed into the US. There are long standing supply chains that require constant shipments of very select parts from the United States that are now no longer functioning.

The CCC allows for transport of these complicated goods, however setting the entire system up took months, which lead to whole sectors of manufacturing shutting down due to lacking key components. Global manufacturing declined by 20% in the year of 2049 compared to 2048.

+ Opportunistic war in the Congo to gain access to resources

Due to skyrocketing grain prices and the absence of the US military to intervene, Rwanda embarked on a imperialist invasion of the Democratic Republic of the Congo. The aim of this invasion was to acquire the DRCs vast quantities of cobalt and other forms of mineral wealth. Due to historical reasons, Brussels was strongly against any intervention and cautioned a hands off approach for the EU expeditionary military.

 The United Nations, however, did approve a military intervention against Rwanda. This intervention was carried out primarily by Nigeria. While operation Tropic Thunder was considered very successful, it did exacerbate the global cobalt shortage caused by the crisis.

+ The Druv'tuul Crisis

The [[[scp-7600|Druv'tuul Council Republic]]] is the second hardest hit by this crisis after the United states. Unlike most of the rest of the world this was not due to the direct effects of the quarantine but the complete and utter failure of the current six year plan.

After the end of Druv'tuul's isolationism with the magma revolution, the socialist country pioneered a novel method of economic allocation, currently known as precognitive central planning. By using vast quantities of magical scrying and other methods of future predicting the optimal economic inputs and outputs were precisely defined well in advance, with shipments of goods arriving exactly when and where they are needed.  

Druv'tuul's integration into the global economy lead to the recession of 2035, as the introduction of a highly industrialized country of two billion people with some extreme comparative advantages in certain goods and services upended the global economy, forcing tens of millions of people to retrain and change career paths.

The primary problem with precognitive economic planning is the massive amount of scrying needed to optimize it, as whenever you want to make a change you will have to re-predict the future, requiring a lot of long term planning. As such these plans are set out six years at a time, with very minimal abilities to change.

Precautions taken by the PENTAGRAM ensured that the arrival of the Washington Viron could not be predicted or scryed. This means that the current six year plan, which was three years old upon the release of the virus, was not applicable. Druv'tuul's factories, the workshop of the world, suddenly choked on their own supply lines.

As the availability of input goods fluctuated wildly, rapid re-planning had to be done. Due to the immense cost in resources and time creating a new six year plan requires, older versions of central planning took over. Like in the Soviet union of seventy years ago, factory managers sent in a request for their required supplies to construct a new plan.

This new plan was, predictably, a disaster. Every manager, afraid of missing quotas dramatically over estimated the levels of required inputs and the complexity of the system overwhelmed the planners. The five year plans of the USSR struggled with their 24 million different types of goods, the Druv'tuul economy has three billion different types of goods. Factories were going idle due to a lack of critical components that were massively overstocked elsewhere.

Druv'tuul's total manufacturing output dropped by 40% in the year after the pandemic, before they could construct a new six year plan, GDP bounced back rapidly as there was minimal loss in sapient or physical capital but it did amplify the global poly-crisis. Global prices on many consumer goods rose significantly due to economic failures in Druv'tuul.  

+ Global uncertainty

Other than the massive heart attack that was the quarantine, there was another major effect of the Washington Virus. Fear and uncertainty. Dozens of questions were in the minds of everyone in the world, from baseline humans, to paranormal individuals to everyone running every business everywhere. What is going to happen next?

With uncertainty comes a rollback in spending and investment. Spending plummeted as did investments as people wanted as big of a financial cushion as possible, most of our audience likely cut back on many expenditures in case something went wrong. The thing is that the flow of the economy is just that, a flow. Everyone's spending is someone else's income. This lead to a massive negative feedback cycle that was made worse by all of the global disruption to the economy via the effects of the quarantine.

Bank runs and failures jumped significantly and global GDP dropped by 15% in 2049, while it did recover fairly quickly, this recession caused significant economic distress for billions.   

+ Supply and Demand shocks

There are two major factors to the economic component of the polycrisis that is the washington virus. Firstly there is the supply crisis caused by the near total disruption to global transport that we are only now digging ourselves out of. Effectively the global economy's abilities to manufacture goods and services has fallen significantly. These supply side issues are driving both the decline in living standards and the significant spikes in inflation we have been dealing with.

Secondly, there is the demand side of the equation. Global uncertainty and negative feedback cycles have meant that people want to buy less. This has lead to mass job losses and further decreases in standards of living.  

+ Fiscal responses

Basic economic theory teaches us that when spending by consumers and businesses fail, due to these kind of demand shocks, governments should step in to compensate. While there were large increases in goverment expenditure the level was generally considered to be insufficient. Major concerns were levied about the possible impacts of inflation in a post pandemic world.

+ Monetary responses.

On the other hand, the central banks of the world pulled the same miracle out of their hat that they did in 2008, 2020 and 2033. These institutions rapidly and precisely flooded the market with as much liquidity as is needed to stave off much worse collapses.

The biggest standout here is the European Central bank headed by Mr. [[[scp-7333|Business Lizard]]]. His leadership is considered to be the reason that the European economy has been the least affected by the global recession.

While "The European Reserve System is open and operating. The discount window is available to meet liquidity needs" might not mean much to you, its broadcast significantly slowed the ongoing stock market crash by reassuring investors that while the heart of the global economy had failed, the backbone was still sturdy.


+ Conclusion

The impact of the global quarantine is diverse and total. Trillions of dollars of economic damages, millions of lives ruined due to the truckload of sand dumped into the fine clockwork that is the global economy. These problems have been exacerbated due to the political inaction by so much of society due to a mixture of cowardness and rent seeking.   

The word quarantine came from the Venetian term "forty days" referring to the time incoming ships had to be isolated for. With the vaccine that Phoenix is developing our forty days are hopefully over.

Leaving us to ask, what is the price of these forty days?


[[div class="end1"]]
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* [# Nigeria petitions to be allowed into the United Nations security council as a permanent member, filling the empty seat of the United Kingdom]
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[[size 1.2em]]**[# Economy]**[[/size]]
* [[[https://www.dailykos.com/stories/2014/9/10/1328813/-The-Astonishing-Story-of-the-Federal-Reserve-on-9-11 | How the Federal Reserve, the ECB, and the People's Bank of China dealt with the quarantine crash]]]
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unVeiled: The Price of Forty Days

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