What’s Troubling The Stock Market: Missiles Not Basis Points

3
37

 What’s Troubling The Stock Market: Missiles Not Basis Points

by David Reavill

Speaking before the United Nations last Wednesday, President Biden referred to the Ukraine War as brutal and senseless. More than a few investors might have thought he was referring to the stock market, which has seen its worst performance in years. The Dow Jones Industrial Average is down more than 15% this year, with the S&p 500, with the tech-heavy NASDAQ down nearly 25%. And if he was referring to this kind of performance as Brutal it’s entirely appropriate. But senseless, I’m not so sure.

Oh, sure, most of the financial press has focused on the latest move by the Federal Reserve to raise interest rates. But higher rates are not the only reason for this economic swoon. Because there seems to be ample reason for the market’s decline, and it’s not all about interest rates.

What’s powering this growing bear market is the increasing threat of Global War. Day by day, we see escalation, in word and deed, by both the United States and Russia. To prevent War, someone must take a step back. Yet neither leader, Putin or Biden, seems willing to back down. It’s getting personal. And that’s a terrible thing.

That’s personal, and it’s in your face. When was the last time a United States President called for the removal of a leader of a significant power? That is just what President Biden did in March when he said: “For God’s sake, this man [Putin] cannot remain in power.”

When Russia began its “Special Military Operation” (SMO), its objective was limited to defending ethnic Russians in Ukraine and defeating the Nazi portions of the Ukraine Military (Azov Regiment). This week, Vladimir Putin called for the partial mobilization of 300,000 additional troops to support the battle.

More Escalation.

President Zelenskyy is imploring the US to supply long-range missiles to strike targets within Russia. Providing these missiles has ignited a debate between White House hard-liners and the Pentagon. Some in the White House encouraged the President to deliver the rockets and thereby open up the borders of the War to threaten the Russian Homeland. To date, Biden has resisted this kind of escalation. However, it is conceivable that he will eventually consent to the hawks in the State Department.

It is these missiles, specifically, that Putin referred to in his speech last Wednesday. He was concerned that the US and NATO would move these long-range missiles directly up to the Ukraine-Russian border. And from that position, Russia would have little or no defense. It would be a direct danger to the Russian Homeland.

At that point, the President of the country with the World’s largest nuclear arsenal made the following statement:

In the event of a threat to the territorial integrity of our country and to defend Russia and our people, we will certainly make use of all weapon systems available to us. This is not a bluff.

A decision to provide Ukraine with these missiles would be catastrophic. One hopes that President Biden was listening. A lot now rides on his shoulders.

You can bet that the Pentagon is monitoring this situation closely. Speaking on Friday, after Putin’s speech, Navy Rear Admiral Charles A. Richards, the US Strategic Command  Chief, noted that we are currently in a situation that we haven’t faced in 30 years: “an armed conflict from a nuclear-capable peer.” As Richards said, the implications of all  this are “profound.”

Indeed, it has been a long time since the US was in a position of direct nuclear confrontation. One such conflict happened in 1962. It was the Cuban Missile Crisis. Then the players were on opposite sides. But the circumstances are eerily similar to those today.

Back then, it was the Soviet Union who threatened to place offensive missiles on our doorstep. Premier Khrushchev planned to locate missiles in Cuba. They would be just minutes from possibly striking targets deep within the US Mainland. Under President Kennedy, America reacted to this grave threat in the most assertive possible manner. Kennedy broadcast his resolve to meet this Russian aggression. In a speech televised to the nation and around the World, Kennedy said:

It shall be the policy of this nation to regard any nuclear missile launched from Cuba against any nation in the Western Hemisphere as an attack by the Soviet Union on the United States, requiring a full retaliatory response upon the Soviet Union.

The speech was very reminiscent of what Putin said last week.

In 1962 it was Khrushchev who stepped back. He showed that he was big enough to de-escalate. The Soviets removed the missiles from Cuba. And in the 60 years since, though, there has been continued conflict and strife among nations. At least we have not faced a direct nuclear confrontation.

Today fate has presented to  President Biden the same choice that the old Soviet leader faced. He can step back and withdraw the threat of missiles on our adversary’s border. Or he can listen to the more contentious factors within his regimen and place a direct threat on Russia’s doorstep.

The peace of the World hangs on his decision.


PowerInbox
5 1 vote
Article Rating
Subscribe
Notify of
guest

3 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments
GuvGeek
GuvGeek
1 month ago

It’s personal because Putin has thrown a monkey wrench into the Biden Crime Family’s operations along with a few hundred more political crime family scams.

Peter B. Prange
Peter B. Prange
1 month ago

Any missile system that can reach the Russian homeland, is a threat of attack when given to a nation that is already at war with Russia. Do the people of the US want to accept the responsibility for any way in which Zalenski, or his equivalent, use weapons from NATO?

Inflation and the threat of involvement in war, could well send investor to gold or other transportable wealth often used by people in wartime.

Inflation up, markets down, a difficult pill for retired people to swallow. A lot less spendable income.

lalasayswhat
lalasayswhat
1 month ago

We couldn’t even beat the Taliban who fought with old worn out weapons, what makes Biden think we could beat the Russians?