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Thinking 2020

Written by Pablo González and Pedro Nonay trying to understand Covid 19’s consequences.

Entry 8 – Covid 19

May 3, 2020

I continue with the predictions:

17. Social subconscious.

After Covid 19, there are many things that will remain in the subconscious of many people, and that will affect their decisions, both their life actions and their political decisions.

These decisions will have very clear consequences until the pandemic is over. Some will even continue in that subconscious, albeit to a lesser degree, long afterward. An example is what happens after any war: people want peace, and people are afraid of going back to war, so they put up with more nonsense as a lesser evil, and save more as a precaution.

It is clear that the subconscious of the majorities is what matters most to politicians, in order to adapt to it, as well as to businessmen, in order to sell their product.

Issues to consider in this regard are:

• Fear of contagion.
  
  Of course, for at least a year, many people will have this fear. For this reason, businesses that require physical proximity to strangers (tourism, hospitality, …) will suffer. 
  
  There will be room for businesses that work with those who are not afraid. There will also be room for those who invent new formulas. But a large percentage of the old face-to-face businesses are going to have a very hard time.

• Blame game: xenophobia.
  
  Even if there is no certain culprit, the uneducated masses are more comfortable identifying one. And politicians will help them in that task (within the concept of geopolitical blocs and puppet states that I have already discussed).
  
  Therefore, in some places the idea will be promoted that the culprit is China, in others it will be “dehumanized capitalism”, … In general, it will be the “foreigner” (no one will accept that it was him).
  
  For that reason, the leaders will be in charge of marketing guilt to the foreigner. Also to the one from here who does not think the same way (with the name of “unsupportive”). 
  
  This leads us to increase the risks of racism, xenophobia, hatred between religions, and others that have been growing for years.
  
  This, mixed with “love of country” (which I have also dealt with), ends up in “hatred of the different”. And it is a hatred that will reach the hands, or weapons.
  
  For politicians it is a fantastic tool. It is enough for them to encourage it to get their votes. And they don’t care if they are right.
  
  Entrepreneurs will have to adapt. It will be necessary to put the leader’s photo in all stores, or witty populist phrases on tiles and big sticks.
  
  Different people will have to live in silence. Let no one know their feelings. And they will have to meet in clandestine places dedicated to their own. Of course, the technology will have them identified (we will have to keep a close eye on what is written on the networks, and the websites ve visit).

• Savings.
  
  In the aftermath of the economic crisis following Covid 19, most people will have a hard time with money. And, those who don’t will be afraid to reach that point.
  
  All this leads to an increase in savings and a decrease in superfluous expenses. Very bad for companies.
  
  

18. Effects on companies.

The effects of the crisis on all companies will be many and varied. Each will suffer in its own way. But some general trends can be identified:

• Social class of the clientele.
  
  Those selling to the upper class will not have too many problems. They will not be affected (too much) by their customers’ savings. Nor will the fear of contagion (their clients are more educated, and their criteria will have a more logical basis and less propaganda). They will be somewhat affected by xenophobia, but that is not bad for business (but it is bad for social harmony). For example, we can find expensive handbags decorated with the message “fuck China”.
  
  Those who sell to the middle class will have big problems. For the simple reason that this class is in “extinction”.
  
  Those of the lower class may even improve. It is for the same reason that their customers increase (even if each of them is worse off than before).

• Change of ownership.
  
  Almost every business has some interesting asset. Even if they have many things badly done (or well done, but for other times).
  
  Logically, the businesses that worked well before the crisis were run by people who understood that world well. Those leaders most likely do not understand the new one well.
  
  It is normal for a generalized process of “change of owners” to occur. In some cases it will be “takeover bid” style (although they are not listed businesses, a competitor with sufficient liquidity and ideas will “buy” the company); in others it will be due to generational change (if the business had a good structure, but the leaders were becoming obsolete); and in others due to the nationalizations I have mentioned above. 
  
  Most of those that do not change owners will go bankrupt. There will be exceptions (there always are), but they will be few.

• Technological adaptation.
  
  It is almost unnecessary to mention it, because it is obvious, but not because it is important. Any business that is not adapted (or does not adapt immediately) to full production and sale by technological means is already dead. 
  
  With the exception of the small ones based on handicrafts, either luxury (painting pictures, …), or those destined to local products for the very low class (the gypsies’ markets, or the local agricultural producers).

• Uncertainty.
  
  For a period of time (until the virus is over and the “new normality” is defined), which will not be less than a year, there will be investment paralysis. Not only for lack of money, but also due to the lack of definition of long-term strategies of the companies due to the lack of knowledge of the new world.
  
  After that moment, which everyone will identify when their “vision” comes to them, there will be large investments in “reformulation” of almost everything. Whoever is able to see it before the others will be able to buy cheaply in time (the assets of today’s bankrupt companies) and manage the risk of change. There are immense opportunities here (with risk of the same size).
  
  

19. Spain (or, Ex – paña? )

Puff. It’s hard to talk about this. There’s a lot of indeterminacy, and a lot of feelings. But I have to try.

Spain is one of the countries most affected by the crisis. Both in terms of health and economics. Moreover, within the economy, its most important sectors will be the hardest hit (tourism).

Because of so much economic affection, added to what was already happening, there is going to be a great mass of affected people going down in social class. A breeding ground for populism.

The first doubt in Spain is to decide which of the two new blocs of countries to join. And this is not trivial, and nothing has been decided beforehand. Those who think that being in Europe is clear are wrong (Europe does not play a role and we can be kicked out of Europe, because of populism, mixed with throwing away the bailout money). Or, we can even leave Europe voluntarily (because of populism, or because they make us a good offer).

For the decision of which bloc we fall into, there is what the powerful (political, or factual) people here think. But there is also what the bosses of each bloc think (who wants us in their lineup?).

I believe that the Chinese or the USA boss, of Spain, does not take five minutes of his time about its economy, nor its 47 million inhabitants (much less their happiness), nor its companies. 

I think the only reason they remember that Spain exists (and a lot) is because of the same thing that happened since the Romans (and before): Its geographical position on the world map, that is, the Strait of Gibraltar.

Besides that, they may be interested in the tourism business of the post virus future, or some agriculture (oil?), but the Strait of Gibraltar is the basics.

The two world power blocs will want to control (or share) Gibraltar, Suez and Panama. Because, even if globalization goes down, it will still be necessary to move goods by ship around the world (and aircraft carriers).

That is why I think that they (the two blocks) are very interested in us, and that they will fight hard to control us. 

Of course, they don’t give a shit about what happens here. What they want is for our government to sign a vassalage pact with whatever bloc we get into, and to show that it controls the country (they don’t care about dictatorship or democracy, and economy or internal quality of life).

The importance is so high that the head of the bloc in which we are involved may agree to pay us the ransom, with the condition that they control the Strait of Gibraltar. This is no different from what happened when the colony of Gibraltar was created (they fought a war for our control -that is, they fought here, not there- and agreed that things would remain as they are).

Someone may think that, with the current colony of Gibraltar, the Strait of Gibraltar is already under control. But that was enough with the old means (and not at all). Today we need the whole of southern Spain. And also Morocco.

I believe that Spain will fall in the same block in which Morocco and the whole Sahel will fall. Whoever controls that, will sail through the southern Mediterranean, and will cross the Strait (and will prohibit, or put limitations on anyone from the other block).

Both blocks are very interested in us. The best we could do is to organize a public auction and then hold a referendum (but there will be no courage for something so transparent).

It is very difficult for me to imagine how the matter will end up. If I have to make a guess (and I do), I would say that China is winning for now (but 60 – 40 percent, no more). 

If we end up in the USA block we would have to solve the ransom payment. A silly idea: we can give the Germans, in exchange for the money, the sovereignty of Mallorca (this was already done in the past with Menorca). They would set up a new Lander there and they would be happy. So would the Mallorcans. Some regions would even ask to make more Lander in other Spanish territories (but the Germans would not be interested).

Another possibility would be that the territory of Chinese control would be north of the Mediterranean. Something like Eurasia, having Russia as the “social transport exchanger” between China and Europe. This possibility is not incompatible with China also controlling the Sahel. But there would be strong opposition from Germany, France, …

Whatever happens to our “last boss”, life here will continue to be based on tourism, corruption scams between the rulers and their cronies, and allegiance to the Strait control.

In addition, there will be daily life among the inhabitants of the country. With a lot of lower class (more or less oppressed).

A gap that we can fill is to create the great Hub of physical communications (flights when we can, which we will can, infrastructures, …) of the western Mediterranean. Today there is no such megalopolis of 10 million inhabitants in the south of Europe. Madrid has good options for it (and I would love it). It would be to have, for these communications, Istanbul on one side, and Madrid on the other.

As it keeps getting long, I will stop here. I warn that I’m finishing (as the quarantine), but I say that I still need to talk (at least) about my predictions for cryptocurrencies, and for the real estate sector (which is where I think I can say less nonsense).

I also tell you that one of those who read these notes, in addition to many intelligent comments that I appreciate and have tried to absorb, has made me a criticism that I share, because I did not know it: it seems that the Real Academia de la Lengua Española does not allow to write the point separator of thousands when dates are written with numbers. That is to say, 2,007 is wrong, it should be 2007. Sorry for so many typos that I have been writing (for so many years).