The magnitude of the impact of Russia’s actions will be felt for decades to come, and they mark a turning point in the world order of geopolitics, macroeconomic trends and capital markets.
This is stated in the annual letter to the shareholders, the CEO of Blackrock, Larry Fink.
“I continue to believe in the long-term benefits of globalization and the power of global capital markets,” said the head of the largest asset management company in the world.
“But the Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades,” he added.
This disconnect between people, nations and companies started two years ago, with the pandemic.
“It has left many communities and people feeling isolated and introverted. I believe this has exacerbated the polarization and extremist behavior we see in our society today,” he said.
And now Russian aggression in Ukraine and disengagement from the global economy will lead companies and governments around the world to “re-evaluate their dependencies and re-analyze their impressions on manufacturing and assembly – something many have already begun to do because of of the coronavirus “, he said.
While dependence on Russian energy is on the rise, it is also possible to see companies and governments bring their operations either inside or near the “home”, something that could benefit Mexico, Brazil, the US or the United States. SE Asia.
And that means higher costs and marginal pressures in view. “While business and consumer balance sheets are strong today, giving them more than just a cushion to deal with these difficulties, a large-scale supply chain reorientation will be inherently inflationary,” Fink said.
He added that the war in Ukraine may accelerate the use of digital currencies as countries reconsider their reliance on traditional ones.
“A carefully designed global payment system can improve international trade while reducing the risk of money laundering and disputes,” he said.
Source: Capital
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