Great thinking Russell; if you were to add India's offtake of items such as veg oil from Ukraine/Russia, potash from Belarus, one can clearly see issues that will manifest themselves in the Ag's mkts. And lets not talk about rare materials needed for semi fabs...
Calling all those economists who had pronounced the death knell for inflation...where art thou??
Another observation is that if Russia controls Ukraine, then Chinese imports of food can all be met by overland transport, reducing supply line risk....
Maybe inflation is caused by the choosing resources for strategic needs, rather than efficiency? And ever since Covid hit - strategic needs have been much more important...
I'd say that you are about 3 weeks ahead of the crowd on this one. Hard to express this conviction in a short term position with all the geopolitical related volatility. Looking forward to the clearing house piece next.
Historically current Russian actions would have had a meaningful repercussions in markets. Bar a few falling Russian shares seems the markets are generally uninterested.
I also have a theory that the move to central clearing, means that risk is priced in the rear view mirror, rather than forward looking - which means markets prices differently to how it did 10 years ago
Very thoughtful piece Russell. Certainly will be worth watching China’s response to Ukraine as they appear to have plenty of skin in the game. Was unaware that the US does not import any oil currently, if this is accurate then suspect they will not be that forceful in their response. The markets are as usual very odd . No currency volatility and almost no equity or bond movements quite remarkable historically . M
if a government objective is to raise real wages, then it should lead to less currency volatility, but more bond volatility (as you are using interest rates to protect a real wage level). I think we are seeing signs of that regime change already
Great thinking Russell; if you were to add India's offtake of items such as veg oil from Ukraine/Russia, potash from Belarus, one can clearly see issues that will manifest themselves in the Ag's mkts. And lets not talk about rare materials needed for semi fabs...
Calling all those economists who had pronounced the death knell for inflation...where art thou??
Another observation is that if Russia controls Ukraine, then Chinese imports of food can all be met by overland transport, reducing supply line risk....
Maybe inflation is caused by the choosing resources for strategic needs, rather than efficiency? And ever since Covid hit - strategic needs have been much more important...
excellent piece - have not seen this perspective anywhere else. thank you for sharing
Nice insight Russell
I'd say that you are about 3 weeks ahead of the crowd on this one. Hard to express this conviction in a short term position with all the geopolitical related volatility. Looking forward to the clearing house piece next.
Or 3 years behind the political actors in Russia and China! We should get an idea soon I think...
Well that is very true, one of the perks of life time rule....
Even if China was a robust democracy, I doubt that they would be chilled about food supply
Overriding need for sure.
The only chance Russia and China can prevail over US hegemony is to have each others back.
Historically current Russian actions would have had a meaningful repercussions in markets. Bar a few falling Russian shares seems the markets are generally uninterested.
I also have a theory that the move to central clearing, means that risk is priced in the rear view mirror, rather than forward looking - which means markets prices differently to how it did 10 years ago
Very thoughtful piece Russell. Certainly will be worth watching China’s response to Ukraine as they appear to have plenty of skin in the game. Was unaware that the US does not import any oil currently, if this is accurate then suspect they will not be that forceful in their response. The markets are as usual very odd . No currency volatility and almost no equity or bond movements quite remarkable historically . M
if a government objective is to raise real wages, then it should lead to less currency volatility, but more bond volatility (as you are using interest rates to protect a real wage level). I think we are seeing signs of that regime change already