Might be worth considering to stock up on food staples like rice, flour, etc.
Because fertilizer prices are going to skyrocket. Could save some money or whatever.
It was what that financial guy Louis Vincent Gave said a few months ago.
Everyone knew that the Americans wanted to cut rates, and will cut rates.
The only problem would be in the case when they were faced with a policy constraint that would not allow them to cut rates, is what Mr. Gave said.
To clarify, in a case of stagflation, the Fed may not be able to cut rates.
Cutting rates would boost the economy.
That does not seem possible now.
That spike in oil prices, will raise the cost of energy, the cost of food, the cost of insurance due to this volatile, and expectations of inflation will fuel inflation. This means everything is going up in price. Once it goes up, due to price stickiness, it stays there at that higher price.
With higher prices for the basic stuff people, there is less money around. Less disposable income means the economy starts to tank. While inflation remains stubbornly high.
This stagflation is like the worst possible outcome, that that is the outcome that should happen now.
All because of this Iran war.
The American economy was not that strong lately. Now it is coming down with a case of a severe flu. And who knows how long that will last.
That is why I do not understand this war. Not only the US lost all their bases in the Middle East, wars usually are good for the economy but not this one due to the military situation pertaining to the Arabian Sea and the oil that needs to transit there, which could make a mild case of stagflation into a unrelenting case of stagflation and recession. It is beyond stupid. Yet here we are.
No wonder the Chinese lowered their growth rate targets to 4.5% as much of the world is going to go into recession this coming year if this war does not end soon and oil prices retreat back to $50 bucks a barrel.