The World Health Organisation has warned that "all of humanity is under threat" from a potential swine flu pandemic and called for "global solidarity" to combat the virus. The plea came as the WHO raised the swine flu threat awareness level to 5 out of 6, indicating that the world is on the brink of a pandemic. Holland and Switzerland both confirmed their first cases of swine flu on Thursday, bringing the total number of countries affected around the world to 11. In Mexico there have been eight confirmed deaths from the virus. … There have been 93 confirmed cases in the US, 19 in Canada, 13 in New Zealand, five in Britain, four in Germany, 10 in Spain, two in Israel, and one in Austria. – UK Telegraph

Dominant Social Theme: Time to panic.

Free-Market Analysis: Obviously so. The leadership, worldwide is beginning to demand it. In America, Vice-President Joseph Biden advises citizens to avoid subways and planes. Mexico has closed its government offices and is urging businesses to shut. The European Union is warning against travel to the Americas, especially Mexico. Egypt has slaughtered 300,000 pigs and put the livelihood of many farmers at risk.

As discussed yesterday, there will be more and more statements of alarm, and Draconian actions as well, as the situation continues. After a week of sustained yet controlled alarm, nations and leaders around the world are indeed doing what they do best – panicking the public. The panic attack has been led by the World Health Organization that, at least until recently, acted with unusual deliberation. But now that stance seemed to have been obliterated by the overwhelming instinct to scream fire in a crowded theatre. Here's some more from the article excerpted above:

Dr. Margaret Chan, the WHO director-general, urged all countries to activate their pandemic plans as she made the announcement on Wednesday night. Dr Chan said that the world was better prepared for an influenza pandemic than at any time in history. However, she warned that the threat "must be taken seriously" due to the ability of the swine flu swine flu virus to spread rapidly across the world. Dr. Chan said that raising the phase of alert was a signal to governments, health officials and the pharmaceutical industry to take urgent action in readiness to tackle a pandemic. Speaking at a conference in Geneva, Dr. Chan said: "Above all this is an opportunity for global solidarity as we look for responses and solutions that benefit all countries, all of humanity. "After all it really is all of humanity that is under threat during a pandemic. The international community should treat this as a window of opportunity to ramp up preparedness and response. Influenza pandemics must be taken seriously, precisely because of their capacity to spread rapidly to every country in the world.

OK, thank you, Dr Chan. A pandemic sounds grim indeed. But in fact, a pandemic merely defines the way a disease spreads. It doesn't define the mortality rate. True, there is a new kind of flu and there have been fatalities from it. But there are always fatalities when disease is involved. The point is to figure out how many fatalities there are and what they arise from. It is not at all clear that this so-called swine flu is more fatal than the average flu. If it's not, then what is the fuss about? Flu comes and goes and is not to be considered a mortal health threat on the whole – or it hasn't been in the past, so what's changed. Here's an excerpt from an article in the New York Daily News comparing the flu fears of 1976 to today's reality:

Outbreak of swine flu could fizzle like 1976 scare … In October 1976, the feds mobilized with a national vaccination campaign. In the city, doctors were given the vaccine to distribute and nearly 1,000 Department of Health workers and Red Cross volunteers fanned out to provide immunizations at 45 clinics. In all, nearly 3 million doses of the vaccine were given out. For months, the grim prospect of an outbreak loomed. It never came. There were no cases after Fort Dix. Eventually, the nation's fears dissipated. This time, cases continue to turn up all over the country. Oddly, that might be an advantage. Instead of waiting in fear for a deadly virus to attack, we have seen the latest outbreak of swine flu strike and we have seen all but one of its victims recover.

The biggest fear of course is that this flu could resemble the Spanish Influenza of 1918. But in fact, as we indicated yesterday, there is much more to the story than a deadly flu ravaging unprotected humanity. In 1918, the flu found its host population (soldiers) in a much weakened condition, subject to starvation, diarrhea and generally susceptible to any kind of disease. Still, it was not the flu that killed so many already weakened soldiers as it was apparently the strep bacteria that followed. In fact, the trick for most organisms is to find hosts that will survive, not weaken and then die. It is an anomalous disease that kills its hosts – for the organisms generating the sickness must inevitably die as well then.

We will close by pointing out there is a great deal of misinformation about the early 20th century influenza and that the fears of the 1976 swine flu were greatly overblown. In 1976, far more people died or were crippled from the vaccines that were developed than from the flu itself.

We're not sure where this outbreak is headed, nor how deadly it will prove. But if history is any guide, the disease will ultimately prove less horrible than the increasingly hysterical predictions surrounding it. So … think hard before taking the vaccines now being feverishly developed. Investigate vitamin D, colloidal silver and other remedies that have a historically positive (at least anecdotal) effect on health and the immune system. Those in charge have every incentive to make what is bad worse, and to exaggerate in general. Alarm, like money, is the mother's milk of politics, public policy, etc.

From an economic standpoint, swine flu is bound to exacerbate an already poor outlook. More than that, those central banking types that stand ready to prime the pump with more monetary easing will probably feel the pressure to do even more to rev the printing presses. Thus we arrive at the byword for swine flu: inflation. Those charged with managing the disease worldwide have every reason to inflate its significance and deadliness, for to do so may result in larger budgets, paychecks, increased responsibility, etc. And for those tracking the world's recovery from the most recent financial meltdown, there will be an urge to re-inflate even more aggressively to compensate for the economic damage done by the flu. Inflation, in either of these cases, is no one's friend.