Global economic pandemic -- remember that?

You think the swine flu has Your Working Boy forgetting about the ongoing economic meltdown. Ha! Let's do a round-up, shall we?

First, Stratfor's morning e-mail discusses the possible economic and political consequences of a swine flu global pandemic, starting with how it could cause people to stay at home en masse to avoid infection:

That in turn could drive a stake into the heart of consumer spending, which is already more than a little weak. If the disease -- or popular perception of the disease -- were to reach pandemic proportions, consumers could begin to view an impulse trip to the mall as potentially a life-or-death choice. Discretionary spending would collide with discretion, as individuals started to forgo trips that would bring them into contact with large numbers of people -- not just at major sporting events and public rallies, but also movies and restaurants.

Depending on the extent of the virus's spread, it could directly affect production: Offices and factories would shut down in areas where the flu was particularly rampant, amid efforts to control it. International travel and trade might well be affected, both voluntarily (as people avoided travel and refused to buy goods from countries heavily infected) and involuntarily (as states acted to protect their populations).

The greatest effect would be psychological. In a world where consumer confidence has already been deeply affected by the economic downturn, a pandemic would dramatically darken the mood of the international system, with potential impact on governments.

Ruh-roh! And even without the swine flu, Ambrose Evans-Pritchard forecasts that some capitalists countries are running pretty damn short of capital. Excerpt:

Great bankruptcies change the world. Spain's defaults under Philip II ruined the Catholic banking dynasties of Italy and south Germany, shifting the locus of financial power to Amsterdam. Anglo-Dutch forces were able to halt the Counter-Reformation, free northern Europe from absolutism, and break into North America.

Who knows what revolution may come from this crisis if it ever reaches defaults. My hunch is that it would expose Europe's deep fatigue - brutally so - reducing the Old World to a backwater. Whether US hegemony remains intact is an open question. I would bet on US-China condominium for a quarter century, or just G2 for short.

The legendary investor Jim Rogers is betting on China emerging from this crisis on top of the world. Excerpt from an interview with Time:

The reason I focused on China is you've said that the 21st century is going to be the Chinese century; you're teaching your daughters Mandarin.

Yes, well, we can pick on China, but remember, the largest creditor nations in the world are in Asia now -- it's China, it's Japan, South Korea, Taiwan, Hong Kong, Singapore -- all the money is here. Even if the Chinese continue to buy, somebody's going to stop buying that stuff. If I was the Chinese I wouldn't buy it. I'm waiting to sell it short at the right time.

Do you think this crisis is just going to solidify the advantages of China and these other Asian and Southeast Asian economies?

Well, again, throughout history, the center of the world has shifted to where the capital is, where the assets are. You don't see any period in history where things are shifting to the debtors, and America's the largest debtor nation in the history of the world. Unless something's different this time, unless the world's changed very very dramatically, the center of the influence, the center of power, the center of the earth, the center of the globe, is going to be shifting towards Asia, because that's where all the money is. Have you ever heard of anybody saying, "Let's go to where all of the debtors are"? It just doesn't happen that way.

Finally, Simon Johnson went to hear Larry Summers speak about the administration's economic crisis strategy on Friday, and came away doubleplus unimpressed. My advice to you: buy stock in Purell.

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