• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Fat Tail Daily

Investment Ideas From the Edge of the Bell Curve

  • Menu
    • Commodities
      • Resources and Mining
      • Copper
      • Gold
      • Iron Ore
      • Lithium
      • Silver
      • Graphite
      • Rare Earths
    • Technology
      • AI
      • Bitcoin
      • Cryptocurrency
      • Energy
      • Financial Technology
      • Bio Technology
    • Market Analysis
      • Latest ASX News
      • Dividend Shares
      • ETFs
      • Stocks and Bonds
    • Macro
      • Australian Economy
      • Central Banks
      • World Markets
    • Small Caps
    • More
      • Investment Guides
      • Premium Research
      • Editors
      • About
      • Contact Us
  • Latest
  • Fat Tail Series
  • About Us
Macro Australian Economy

You Think You’ve Escaped COVID-19? But Now What?

Like 0

By Nick Hubble, Saturday, 17 October 2020

Congratulations Australia. We had no excess deaths between mid-February and the end of May according to a study.

Congratulations Australia. We had no excess deaths between mid-February and the end of May according to a study.

That’s compared to a 37% increase in England and Wales, and a 38% increase in Spain, for example. They’re the worst performers in the study.

In fact, deaths in Australia actually fell relative to what was expected!

Not bad is it? Especially for a pandemic…

I better explain the details of the study before we get to what’s completely disastrous about the result.

The study was of 21 developed countries and published in the journal Nature Medicine. It was led by Imperial College in London. And the ‘excess deaths’ measures how many more people died than you would’ve expected normally.

The idea is that it’s hard to figure out who had COVID-19 and when. Especially when nations record their statistics differently. So, if you just measure excess deaths, you can get a reasonable idea of how many people the lockdown measures killed.

Pandemic, I mean.

How many people the pandemic killed, not just the lockdown…

How to Survive Australia’s Biggest Recession in 90 Years. Download your free report and learn more.

Anyway, Australia fared well, alongside New Zealand, Hungary, Czechia, Slovakia, and Bulgaria.

My question today is, now what? And I think it’s going to be a tough one to answer…

Consider, if Australia were to open its borders, what would happen?

The pandemic would likely strike Australia worst of all.

That’s what happened to the other nations sitting alongside Australia and New Zealand. Eastern Europe is in the grip of major outbreaks.

Czechia especially. Their excess deaths were well below what was expected in the study. But that was between February and May, remember. Now they’ve got the worst rate of infections in the EU according to the European Centre for Disease Prevention and Control. And, according to The Guardian, it’s even worse than their ‘worst-case scenario’.

Given the scenario was ‘advanced’ by a Czech epidemiologist turned politician, I’m not surprised they got it wrong. No two professions have been as humiliated by the pandemic as those two.

Meanwhile, Sweden, the nation most criticised for its lack of lockdown, and which saw a mid-level amount of excess deaths in the period covered by the study, is doing rather well of late.

But back to our real topic. Australia escaped COVID-19 comparatively unscathed. Largely by avoiding an outbreak in the first place. By shutting borders to its own citizens, keeping them confined in a hotel room without windows, and using the military to guard them.

The thing is, we can’t open borders now. Or we’ll just be the next poster child of disaster. Alongside Eastern Europe.

We’re stuck.

So, what if Australia doesn’t open its borders?

Can we go on like this?

Will we be left behind by the global economic recovery? Will our economy get dragged under by the lack of tourism and business travel? Will we have to live in fear of imminent outbreaks and lockdowns each time restrictions are eased?

You can see where I’m going with this now, can’t you? Australia has escaped COVID-19 rather well. Great. But we’ve painted ourselves into a corner by doing so.

We can’t recover from the pandemic, because we haven’t really had it. Yet.

And, when we do have it, another wave of economic chaos will be unleashed. While other nations around the world are already on the path to normality, Australia is yet to experience the pandemic.

The solution to this obvious conundrum was supposed to be the end of the pandemic. Or a vaccine.

I don’t see either happening anytime soon…

And neither are likely to be effective constraints against a new outbreak either. Vaccines will have limited effectiveness and further waves are surely only a matter of time away in a country that didn’t have a real first wave.

While other nations are establishing ways of dealing with the virus, Australia will be left behind. And left in fear. For years to come, perhaps. If it takes that long for the virus to strike.

The good news is that we’ll get better at combating the virus when it does come. Despite the politicians and epidemiologists’ mistakes — we might learn from others’ mistakes. Fatality rates will decline and be very low here. And we might get a more organised response to outbreaks than other nations saw.

The bad news is, our economy is the collateral damage in all this. And, while much of the world has gone for a short and sharp contraction, Australia’s vulnerability to future COVID outbreaks will drag it down. For longer than elsewhere.

COVID is coming for you. And waiting for it is not going to be very nice.

What does this mean for investors? Well, anyone putting money to work in the Aussie market is asking for trouble. Because a major outbreak could strike at any point, undermining stocks again.

You’re better off buying in countries that have the worst behind them. Or buy investments that benefit from COVID-style chaos.

Until next time,

Nick Hubble Signature

Nickolai Hubble,
Editor, The Daily Reckoning Australia Weekend

PS: Australia’s Great COVID Recession — Learn which investments to accumulate and which ones to avoid in order to give you the best chance of preserving your wealth during the recession. Click here to learn more.

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

Comments

Subscribe
Notify of
guest
guest
0 Comments
Inline Feedbacks
View all comments
Nick Hubble

Nick Hubble found us at Fat Tail Investment Research in 2010 after a stint inside Wall Street’s most notorious bank, Goldman Sachs, during the 2008 GFC. That’s where he saw the true nature of the investment banking business. Since then, he’s been the editor of the Daily Reckoning Australia and the UK-based Fortune & Freedom and Gold Stock Fortunes.

He’s delighted to work as Investment Director and Editor for Jim Rickards’ Strategic Intelligence Australia. Here he helps turn Jim’s big-picture views into specific actionable advice and ideas for Australian investors.

Nick’s Premium Subscriptions

Publication logo
Jim Rickards’ Strategic Intelligence

Latest Articles

  • Critical Metal Stocks: Following the Iron Ore Playbook
    By James Cooper

    How does inconceivable capex find its way into new mining projects? Answer: Higher commodity prices. James Cooper compares the iron ore boom from the early 2000s to what may lie ahead for critical minerals.

  • Copper traders: gettin’ jiggy with it
    By Callum Newman

    Copper has now broken into an all time high after threatening to do so for some time. There’s no reason to think it’s going to go down, either, if the market views Trump as serious. The race is on to buy up what you can before the tariff goes into effect.

  • Australia ain’t the USA…and that’s great!
    By Callum Newman

    The outlook for Australia and the ASX are very different to the US and US shares. Here’s why…

Primary Sidebar

Latest Articles

  • Critical Metal Stocks: Following the Iron Ore Playbook
  • Copper traders: gettin’ jiggy with it
  • Australia ain’t the USA…and that’s great!
  • The biggest infrastructure spending boom in history just kicked off
  • You Read it Here First: Great Asset Rotation Underway

Footer

Fat Tail Daily Logo
YouTube
Facebook
x (formally twitter)
LinkedIn

About

Investment ideas from the edge of the bell curve.

Go beyond conventional investing strategies with unique ideas and actionable opportunities. Our expert editors deliver conviction-led insights to guide your financial journey.

Quick Links

Subscribe

About

FAQ

Terms and Conditions

Financial Services Guide

Privacy Policy

Get in Touch

Contact Us

Email: support@fattail.com.au

Phone: 1300 667 481

All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you’ve invested. While useful for detecting patterns, the past is not a guide to future performance. Some figures contained in our reports are forecasts and may not be a reliable indicator of future results. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.

Fat Tail Logo

Fat Tail Daily is brought to you by the team at Fat Tail Investment Research

Copyright © 2025 Fat Tail Daily | ACN: 117 765 009 / ABN: 33 117 765 009 / ASFL: 323 988