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24th April 2019
As the world heads back to cinemas, choc top in hand, to discover the fate of the Avengers and wider universe in End Game, we began to reflect on the events of the last movie. It lead us to question how an event, such as half the population dying, would impact the global economy and, in turn, foreign currency.
If you have no idea what I am talking about right now, I would recommend you get a wriggle on and watch the 21 movies leading up to Avengers: Infinity War. Alternatively, keep reading through the spoilers in your quest for knowledge.
Long story short: the villain in Avengers, Thanos, believes the world (and greater universe) is overpopulated. The world has a finite amount of resources that are being consumed at an unsustainable rate. Instead of providing more resources, Thanos chooses to wipe out half of the world's population with the click of a finger. Easy, sweet as bro, no stress.
Wrong, there is a lot of stress. People are sad because half of their friends and family are dead. Dogs are without their owners, sea otters are without their cuddle partner (google it, it's super cute), and governments are without their leaders.
For the sake of this article, we are going to assume that everyone turns into dust as per the movie. Otherwise, there would be a lot of dead bodies smelling up the place that would, quite literally, open up another can of worms. Furthermore, we have no control over who has died, nor do we have any superheroes or Chris Hemsworth’s to save the day. The survivors are left to deal with half the economy and double the sadness. Lucky them.
Here’s a breakdown of what we think could happen. Keep in mind this is purely hypothetical (duh), and we actually have no idea what would happen. Fingers crossed we never have to find out.
Immediate impact:
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We don’t know who is going to die, but chances are a lot of political figures will be gone resulting in considerable gaps in governments and global organisations. It would take a fair bit of time for the dust to settle (pun intended) as new officials and leaders are elected. During this time one can only assume political and economic anarchy would ensue.
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Individuals may take advantage of reduced authorities and begin looting as a means or survival. Why buy food when your next door neighbour (RIP) has a fully stocked pantry with no one to eat it, right?
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Global Financial markets would freeze, at least momentarily, as everyone comes to terms with what has happened. People would have the same amount, if not more, money as a result of inheritance, however, the supply and demand function would be severely damaged and general society would cease to operate as it currently does due to a lack of resources. This could very well lead to an economic collapse on a global scale.
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The supply and demand chain will be disrupted. The ability to export and import goods will be impacted by the skills shortage and general period of anarchy which will, in turn, result in shortages of some products and surpluses of others. This would lead to inflation in the price of some goods and services, and the reduction of cost for others. Such inflation could make day to day necessities too expensive for many people.
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Half of the world’s investors would be wiped out, which means less money is being invested in the share market and foreign currencies. It is likely countries with necessary resources for survival will emerge as economic leaders, and the value of their money will soar as individuals seek their exports.
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Foreign currency and money itself may fall to the wayside as individuals instead barter with gold, goods and services. In other words, there could be a transition from fiat money to commodity money.
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People would probably take a break from overseas travel as they mourn the loss of their friends and family and come to terms with what has happened. Less tourism = less demand for foreign currency. Not to mention resources needed for tourism such as airlines, transfers, booking agents, insurers and hotels would be severely understaffed.
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The supply of resources needed for day to day life, such as electricity, water and food, would be dramatically impacted due to workers dying and failing to keep things running.
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Wiping out half the population means ridding the earth of specific skills. The resulting skills shortage would halt certain advancements for medicine, technology, politics and economics. This would put a massive dent in the economy as people upskill and adjust.
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Insurance companies would go bankrupt from all of the life insurance claims being processed.
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Brexit would probably be forgotten about as people have more important things to deal with and wouldn’t be bothered continuing on with the current political mess. In saying that, new political, social and economic organisations and alliances may be formed to ensure survival and gain power.
After some time (and by some time we mean after quite a few really, really horrible years.)
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After the election of new leaders, there would be new economic policies put in place that could drastically impact the movement and value of currencies.
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There would be a surplus in the availability of housing, leading to a decline in house prices.
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Individual workers will charge more as their skills are more highly regarded and harder to come by.
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New trade deals and government policies would be put in place that would have a substantial impact on the value of global currencies.
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A new economic world leader may surpass the US and China whose economic and financial decisions could have a significant impact on the value of currencies and the prevalence of democracy.
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There would be a massive expectation on women to have children and populate the earth. As women take time out of work to raise children, there would be even fewer people and skills in the workplace which will have a significant impact on economic growth.
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Technology would be less reliable with fewer people to support the infrastructure and longer times to repair any damage or provide updates. To combat this, old techniques and methods of creating things may resurface. These are extreme examples, but imagine handwriting things because computers aren’t working and can’t be charged due to a lack of electricity (gasp) or the need for horses and wagons because there are no mechanics nearby to help fix your car (neigh).
As you can see, losing half of the world's population would have pretty dire consequences for the economy and human race in general. While the long term would eventually see things resume to a somewhat less terrible state, the world as we know it would never be the same again. Whether it became better or worse is unknown. We do know it would be quite rough for a pretty long time.
There have been economists in the past that have theorised the need for such an event due to the explosion in the global population. Thomas Robert Malthus published a paper called The Principle of Population where it essentially says that if we don’t check ourselves, we will indeed wreck ourselves.
He has since been disproven, as economists show that economies are not zero-sum. In other words, wealth does just exist and get divided up between everyone. Instead, wealth is a side-effect of human ingenuity that will expand with every new innovation. History has proven that when humans find a problem, they generally work to create a solution. While we have a fair bit of work to do to ensure the Earth continues to flourish and support the needs of current and future generations, a mass genocide such as the one carried out by Thanos is 100% not the answer and would, instead, make things a hell of a lot worse.
From a travel point of view, losing half of your friends and family won’t really put you in a holiday mood. So, quite frankly, you probably won’t give a rats bottom about travel money or the fluctuations of currency.
Do you know what will put you in a good mood though? Joining the Travel Money Club and being in the running to win $500* every month. Plus you’ll have access to plenty more hard-hitting articles like this one (and some pretty solid travel tips and tricks as well).
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