Will The War End this Economic and Market Cycle Suddenly ? 15% Equity Market Correction Takes A Bite Out of Investor Wealth and Confidence!
March 9, 2022
By Mitchell Anthony
WILL THE WAR END THE ASSET BUBBLE, ENTRENCHED INFLATION, AND THE RECKLESS CONSUMER?
This economic cycle has been wrought with problems. At the top of the list are consumption and consumer confidence issues which have been dealt with through easy monetary policy and fiscal stimulus. However the solutions had collateral damage and we now have entrenched inflation, a consumer that spends with unbridled optimism, and asset bubbles in real estate and financial assets. Now to add insult to injury we have a wild man at the helm of a nuclear enabled superpower that is acting reckless and has declared war on the Ukraine. Historically war has destroyed consumer confidence and pushed the economy into recession quickly. However this war is like none other and the world has to fight Mr. Putin with economic warfare rather than military warfare. This has only exacerbated our problem with inflation because it has been rooted in capacity problems for raw materials of all types and now we add to it things produced by Russia and the Ukraine like oil, natural gas, and some agriculture like wheat. This war will undoubtedly effect consumer confidence along with the higher price of gasoline and soften the demand side of inflation. However the US consumer is not entirely rational and the central bank and Congress left the punch bowl out far too long and the US consumer is addicted to free money and has bankrolled much of it for continued use and spends recklessly as a result. Hopefully a more sober price conscious consumer will emerge?Read more
