Preparing Your Finances for a Bird Flu Pandemic
If you have been paying attention to the news lately you may of
heard of the threat of bird flu and a world pandemic. What would
this mean and how would it affect your financial holdings. The
World Bank, which has estimated that a bird flu pandemic lasting
a year could, cost the global economy up to $800 billion
dollars. The economic toll on the world economy will be
catastrophic. That is a forecast no investor wants to hear. Even
a "mild" pandemic could wreck havoc with your investments.
During a flu pandemic millions of people would be unable to work
due to illness and taking care of sick family members. Schools
and businesses would be closed, transportation reduced or
halted. Ill truck drivers, rail and warehouse workers would
bring interstate commerce to a grinding halt. How many air
traffic controllers could be out sick before flights were
cancelled? International travel would all but be eliminated.
Businesses hardest hit would include retail, trade, education,
travel and tourism, public entertainment and anywhere large
groups of people would gather such as sporting events and
concerts. Import and exports markets would be devastated.
With millions out of work and unable to pay their bills
including rent and mortgage payments, financial institutions
facing mounting defaults would have no choice but to suspend
debt owed until the pandemic was over. Other financial
institutions would face similar threats of collapse until
business returned to normal. But, how long would that take?
Thousands of businesses may never be able to recover resulting
in the loss of millions of jobs. Large and small businesses
alike may loose key employees who would be difficult to replace.
Moving forward businesses would face labor shortages due to the
millions who died, making a return to full productivity
difficult.
The global economy could take years to recover. Individual
business recovery could be painfully slow. Government spending
to aid recovery would go through the roof, yet they would be
receiving less in tax revenue from businesses that closed and
individuals out of work. The stock value of the largest
businesses could collapse devaluing millions of investor's
portfolios. Investors may dump their stock holdings in favor of
cash and hard assets like gold and silver. Housing prices could
plunge as millions of homeowners go into default. Financial
panic could wreck the markets in short order.
Many essential items could be in short supply due to loss of
production capacity. Gas and oil deliveries could take months to
return to normal production. Consumer spending would be down
further delaying economic recovery.
Global instability would be the rule rather than the exception.
3rd world countries devastated by the pandemic could face new
internal struggles for power as whole armies could be wiped out
by the flu. International trade relations we once had may no
longer be there.
A world pandemic would set the dominos in motion. One event
would trigger another; one financial collapse would bring on the
next one. The results would be nothing short of catastrophic.
As an investor your first course of action is to stay informed.
A bird flu pandemic may not happen for years, but health experts
say it will happen, it is just a matter of time. But then there
is always natural disasters and terrorism to worry about. The
more you know about a possible bird flu pandemic the better
position you will be in to adjust your portfolio accordingly
when the time comes if not sooner.
Diverting a portion of your assets into stocking up on essential
food and supplies may be a prudent move, since a pandemic may
keep you housebound for months at a time. No well-diversified
portfolio will help you out when the grocery stores are closed
and you are waiting in line for a government hand out.
Stay informed, plan accordingly, and be prepared.