by definition geopolitics refers to a geography’s effects on politics and international relations but when you commingle a global economy, events on one side of the world can place major constraints on personal finance. think “butterfly effect”… the flap of its wings stirs the winds that create a hurricane. a leaf falling to the ground begins the tremors of an earthquake and when one country violently invades another country and disrupts the natural resource market... well, you see where this goes.
yesterday's price, is not . . .
inflation is a distance runner. global trade agreements mean we aren’t self-sustaining. when one link in the chain weakens, the entire system is comprised. think what you like about drilling for oil, mining for cobalt, or erecting the next hydro-electric dam, regardless of the resource we are talking about, choosing to buy over build means there is no plan B. we get sucked into an endless cycle of quid pro quo where if we want something we have to accept the terms of bad actors. insert the negotiation talks.
supply chain issues
at the core of such supply chain disruptions is a simple economic concept: supply & demand. if you remove seven million barrels of oil from daily production an imbalance between the two creates price fluctuations--where recently we have seen rising fuel prices. inflation and price hikes disproportionately attack people already experiencing chronic poverty or living paycheck-to-paycheck. recent spikes in the cost of energy and consumer goods can potentially set people farther behind. some people will be just fine, they'll travel less this summer but eventually, it’s not just less gas in the tank. soon your grocery cart isn’t as full, and the light bill is noticeably higher. make saving a priority.
disclosure: the ideas, thoughts, and opinions in this article are our own, except where sources are specifically cited, and are property of millennial financial planning. this article is intended for informational purposes only, and does not serve as direct financial advice. speak with your financial professional for direct advice and guidance. all investments contain risk and the potential loss of principal.
“think butterfly effect”