While we’re all busily over-focused on inflation and the Fed, a geopolitical storm could well wreak havoc on the markets sometime in the next couple of years.
Looking forward to the Presidential elections - despite the midterm outcomes - history shows that the current state of the US economy hardly bodes well for the incumbent.
While we still don’t know if we’ll face an outright recession, most American households are certainly feeling crimped.
For example, last week the Bureau of Labor statistics reported that “real average hourly earnings decreased -2.8 percent, seasonally adjusted, from October 2021 to October 2022.” (Real wages takes into account inflation while nominal wages don’t.)
Multiple geopolitical fissures could easily boil into conflagration, providing Americans with a timely distraction from their economic woes.
Might Biden play the white knight, pouncing when an ally’s adversary crosses a line?
The reality is Iran, Russia and China are perilously close to missteps that could justly (in the view of America’s leadership and her global partners) result in a limited but real military confrontation.
A few possible upcoming attractions might include; Iran’s nuclear advancement threatening Israel, China over-playing a show of force in the Taiwan Straights and/or Russia’s saber-rattling at yet another US ally.
Indeed, for Biden, an ounce o’ Putin might be just the thing to forever differentiate this old Democrat from another old Democrat (called Jimmy Carter). And, wrapped in the afterglow of this or that contained victory, Biden - or his chosen heir - could rally round the flag - and win again.
