Inflation, Fed Tightening, War in Europe = Volatility
As the world cranks up sanctions against Russia, far too slowly and far too weak, fear grows that inflation, already at running at its highest level in 40 years, is here to stay unless drastic action is taken by the Fed. The Biden team has crashed our economy.
In addition, supply chains remain in peril as the world is bracing for higher energy and commodity prices. Oil is surging with the average price of a gallon of gasoline recently hit an all-time high of $4.17, compared to $2.77 one year ago. Drivers in California need to fork over an average price of $5.44 a gallon. Where’s the good news? We are not sure other than volatility rolls on.
The major force is radical uncertainty which brings us the big swings we have witnessed. Uncertainty with its son volatility looks like it will continue into the future with current events spiraling downward almost anything could happen – WW3? History shows us that the world stood by as Hitler invaded country after country waiting and hoping he would stop. It is clear the world learned nothing from WWII. Had we stepped in early in WWII losses would have been minimized. But we waited – our guess for stock prices in this environment: downward.