The next 100 days are the most crucial for Australia since the Cold War

Two events are about to collide to create a potential economic bloodbath, the likes of which hasn’t been since the Cold War.

In the next 100 days, two massive threats will develop that could – if things go bad – change the course of history. First is the American election and its aftermath. Second is the pandemic winter.

On November 3, next Tuesday (Wednesday morning our time), President Donald Trump is tipped to be voted out of the White House. Polling gives Joe Biden a nine-point lead – that’s a big lead. Prediction website FiveThirtyEight gives Biden an 89 per cent chance of winning. The Economist magazine gives Biden a 95 per cent chance. Betting markets also have him as the favourite, albeit more narrowly.

However, there is a risk to America that, like last time, the election result is not as clear. Polls were wrong at the last election – they said Clinton would win. It could be close, and that could mean Mr Trump doesn’t leave office. He’s due to vacate office by January, if he loses.

RELATED: Biden’s long fight to take on Trump

President Donald Trump speaks with former President Barack Obama and former Vice President Joe Biden during his inauguration ceremony on January 20, 2017. Picture: Paul J. RICHARDS / AFP.

Mr Trump has been asked to confirm he will leave office if he loses, and declined to confirm that. He may be able to find ways – using court decisions to stop vote counts, for example – for him to stay. That would create a mess in America.

Mr Trump has been softening up voters by saying the election is rigged and suggesting mail-in ballots are fake. People hope he won’t follow through on the implication that the election result won’t be worth respecting. But what if he does?

RELATED: America’s confusing voting system explained

RELATED: How mail voting works in the US

Donald Trump tweet about a potential mail voting scandal.

America has had constitutional crises before. But never in the context of rising competition with China. China provides an example to the world of a successful country without democracy. America is the best example of democracy – it’s supposed to be a shining beacon of freedom. But if America has a messy, contested, disputed election, with violence on the streets and fights in the courtrooms, China will see weakness.

The sense of impending doom is doubled by the virus.

CORONAVIRUS CRISIS

The Northern Hemisphere matters. It has 90 per cent of the world’s population and 92 per cent of its GDP. While we look forward to summer, winter is coming for most of the world.

Last northern winter, the virus had the element of surprise. It popped up in January and spread around the world in February and we were unprepared. This winter we know it’s coming. But last time warmer weather intervened after only a few months, in time to help Europe and America curb the spread by July and August. Now the virus is surging across the cold parts of the world and it is only October.

Winter exacerbates the spread of the virus because people are indoors more with windows and doors closed. The closer together people are, the longer they spend together and the lower the ventilation – basically the more cosy the situation – the easier it is for the coronavirus to spread. Coronavirus thrives on cosy.

If you look at a map of America, the spread is generally worse in the coldest parts – the north, further from the sea. Luckily most of those states are sparsely populated. Wisconsin, right in the north of America, near Canada, has some big cities and has one of the worst spreads. But the really big cities in America are not cold yet.

The average maximum temperature in New York City in October is 18 degrees Celsius. In December the average maximum temperature is 7 degrees Celsius. That’s when New Yorkers will be huddling inside and spreading the virus.

Colder parts of the US have seen higher cases of COVID, as demonstrated by the dark blue on this map.

Europe is at massive risk. France waited far too long to lockdown. France had 50,000 new virus cases in one day last week, as the next graph shows.

France let their cases skyrocket before locking back down.

Soon they will be overwhelmed, even with a tough national lockdown. As Victoria learned, even after you announce restrictions, things continue to get worse for a while. France was in denial because people had pandemic fatigue. Nobody wants to go back into lockdown.

Pandemic fatigue might be the main enemy this northern hemisphere winter. Last winter, the virus only showed up right at the end, February. This year it’s picking up in autumn. The salvation of some warm sunny days is a long way off.

ECONOMIC SHOCKWAVE

The viral spread and the lockdowns that will follow will likely crunch European and American economies. That’s bad news for the whole world. In the short run it could harm confidence via crashing stock markets and negative headlines. Australian stockmarkets follow global markets these days, and that leaks into the real economy. Our confidence will crash alongside theirs.

The long-run effect will also matter. A big lockdown scars an economy, making some people unemployed forever and leaving the economy worse off. That harms people directly and also has political effects.

Poor angry people vote for disruptive angry politicians. Just look at Europe. Germany, where unemployment was round 3 per cent, has had the same boring Chancellor now for 15 years. She was elected back when John Howard was Australian Prime Minister. But Italy, where unemployment has been more than 10 per cent, they elected a new anti-Establishment party called the five star movement. China is also very much aware that economic stability creates political stability.

THE WEST IS AT RISK

Both the threat of COVID and political uncertainty in the US will peak in the next 100 days. They threaten Europe and America – the core of the west.

This threat to Europe and America comes at a time when a clash of cultures is brewing. China’s way of government and way of life, vs. the west. Democracy and freedom vs. dictatorship and censorship. China’s model works very well. We might like to think it doesn’t, but it has made a lot of Chinese people richer and very patriotic.

I don’t pretend the next 100 days can deal a fatal blow to freedom. Europe and America are stronger than that. But it can wound the ideas of the west at the dawn of a century where they will need all the strength they can get.

Jason Murphy is an economist | @jasemurphy. He is the author of the book Incentivology.