Do you really think that the only thing affected by the outbreak of geopolitical conflicts in the Middle East is our wallets?
Let me get straight to the point: don’t think that wars in the Middle East will only make us spend more on gas; behind this lies a super bomb capable of shaking the global economy: oil prices.
If you look at modern economic history, you will discover a terrifying pattern: whenever oil prices soar, a financial crisis is sure to follow. Since the Arab countries wielded the oil weapon in 1973, the global financial community has been haunted by the fear of oil prices for the past fifty years.
The first oil crisis directly plunged the United States into a period of stagflation, with stock markets plummeting to the point where even a mother wouldn’t recognize them; during the Iranian Revolution, the Federal Reserve was forced to raise interest rates to the sky, leaving global investors crying as they counted their money; during the Gulf War, energy prices and the credit crisis teamed up to rub the U.S. economy into the ground; the 2008 financial crisis was superficially caused by subprime loans, but fundamentally stemmed from the collapse of oil price bubbles leading to a demand crash; even last year’s Russia-Ukraine conflict made global stock and bond markets experience a roller coaster ride.
You might say, are all these crises really caused by oil prices? To me, the relationship between war and economic crisis is like the chicken or the egg problem, but every time the global economy is on the brink of disaster, oil prices are sure to fan the flames. What’s even more concerning is that now the Middle East and Eastern Europe are both in conflict, and these two global energy lifelines are trembling together; just imagining this scene sends chills down my spine.
I’m not trying to spread anxiety here, but the reality is clear: when the energy market becomes a powder keg, our stocks, mutual funds, and real estate will all ride the roller coaster along with oil prices. Right now, the global capital's gaze on the energy market is like a startled bird seeing sparks.
We ordinary people may not be able to influence the outcome of the war, but we at least need to see the situation clearly; the energy issue is a blade hanging over everyone's head, and peace and stability are the most solid insurance for wealth preservation.
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