Macroeconomic analysis is simply compared to geopolitics. With the former, we can start at some baselines that will not change. The same is not true with geopolitics.
In this video I discuss how we are seeing the geopolitical situation radically altering the macroeconomics. This is causing any analysis to be fluid at best (and impossible at worst). Perhaps Buffett was right, avoid stocks in times of war.
▶️ 3Speak
I think you really made a lot of points considering the geopolitics issues happening in the world especially with the explanation on industries, that's really a nice point to really look at and the inflation and deflation of price been said also it's incredible
I have seen calls for $300 oil lately so it would be fairly crazy to see how much oil costs. I wonder how people will travel because gas cars might not be worth it.
I agree that discretionary spending will drop because there just isn't enough for extra stuff. If people can't pay for food, I can fully expect a riot or something closer to a civil war.
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totally true geopolitical actions greatly affect all economic activities worldwide. Let's hope everything happens quickly and we can see our economy continue to grow
I keep thinking that someone should remind Russia that they tried to annex a far smaller and seemingly ill equipped foe in Afghanistan... and even with all their might and war machine, nine years later the Russians withdrew, unsuccessful. Depending on who you ask, that war contributed to a lesser or greater extent to the collapse of the USSR.
But I guess Putin has a short memory, or is mentally ill. Unless, of course, his objective is not bringing Ukraine back into the Russian "Empire," but to cause global economic collapse... which would still make him mentally ill.
In the meantime, I guess all we can do is watch it all unfold and hope for the best.
=^..^=
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Summary:
In this video, Task discusses the challenges of analyzing the geopolitical situation between Russia and Ukraine and its impact on global economics. He explains that while macro analysis relies on stable factors like demographics and geography, geopolitics is complex and unpredictable. Task highlights the recent banning of Russian oil imports by President Biden as a political move that could lead to economic repercussions globally. He warns about the dangers of inflation, potential deflation, job losses, and economic collapse, particularly in industries heavily reliant on oil.
Detailed Overview:
Task starts by contrasting macro analysis with geopolitical analysis. He explains that macro analysis builds on stable factors like demographics, geography, and industry, which serve as reliable pillars for economic modeling. On the other hand, geopolitics is volatile and can have far-reaching consequences due to unexpected political decisions and actions.
He delves into the ongoing situation with Russia, emphasizing how global reactions, such as targeting Russian citizens and businesses, are affecting confidence in the financial system. Task mentions the politicization of the SWIFT network and the banning of Russian oil imports, leading to a significant increase in oil prices. This spike, driven by political motives to hurt Russia, could have severe implications for the global economy, potentially causing inflation and economic devastation.
Task challenges the common narrative that inflation is bad, warning that deflation can be equally detrimental, citing examples from history like the Great Depression and Japan's prolonged deflationary period. He highlights the domino effect in deflationary spirals, where people cut back on spending, leading to economic collapse, job losses, and ultimately, famine.
The discussion moves to the impact on various industries as oil prices soar, particularly affecting delivery companies, service providers, and businesses reliant on transportation. Task predicts that rising fuel costs could force companies to reduce their payroll, make layoffs, and adjust their operations to cope with economic challenges.
In conclusion, Task stresses the interconnectedness of geopolitical events and economic outcomes, urging viewers to pay attention to unfolding developments that will eventually manifest in economic data. He emphasizes the importance of monitoring the situation closely to assess its full impact on global economics.