The Gray Swan Volume 5: Could The Demise Of China Be The Next Gray Swan?

Published Date
June 26, 2020

By Bill Taylor

Gray swan is a term used to describe a potentially very significant event that is considered unlikely to happen but still possible. Because there is a slight chance the event will occur it should be anticipated, particularly as it could shake up the world, economy, and stock market

It has been argued that the coronavirus was a gray swan event. Why? Over the years there have been several global viruses that did not rise to pandemic levels but certainly made people aware that such an event like Covid-19 could happen at any time. An event in plain sight waiting to happen – a gray swan.

So, are we starring at a huge gray swan event playing out like the demise of China? The very Covid 19 pandemic may accelerate the demise of China and its leadership. The democracy demonstrators in Hong Kong have brought forth attention on how China chooses to deal with unrest. But the handling of how Covid-19 developed and spread exposed to the world how China actually considers its global neighbors. Exposing the globe to economic chaos and medical emergencies created a bitter backlash toward China with Germany, the UK and the U.S re-thinking trade relations. I think that others will follow. Indeed, two states in the U.S. are taking legal action against China for damages. The world’s view of doing business with China has changed dramatically.

Now, what if there is one more ignored part of this gray swan that investors have not considered? It seems the leader of North Korea, Kim Jong Un, has not been seen as much publically lately. What if Kim Jong Un has or had Covid 19? A Chinese medical team had been summoned— not a good sign –to assist while Kim Jong Un took some time off several weeks ago. But what if Kim Jong Un actually dies from a Chinese inflicted virus? What would North Korea do if it turned out China “killed” its beloved leader? Would his younger sister, Kim Yo Jong, take over? It seems that she has indeed exerted her power recently.

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