Russian War Drums

19 Feb 2022

Dear Fellow Investor,

Mainstream media including CNN, the UK and US politicians have been beating the Ukrainian/ Russian war drums.  Fear and hysteria have been whipped up which has resulted in massive rises in oil prices, an upside breakout in gold and gut-wrenching volatility in most world stock markets. Below is the front page from the New York Times of 21 Oct 1962 headlining the Cuban missile crises between the US and the Soviet Union. I remember being a young student during this potential nuclear war.  The media and politicians advised us to store food and water and be prepared for war and a holocaust.

 

 *Notice the price of the NY Times. Only 5 cents. Now the NYT is 7 USD for the daily edition.                             

 Cooler heads prevailed and within a week the crises ended. President Kennedy agreed to pull out the US missiles from Turkey in exchange for Russia to pull out its missiles from Cuba.

My bet is that a compromise as in 1962 will be worked out and the stock market panic and volatility will subside.   

Of more concern is rising interest rates and inflation. Should the US Federal Reserve end quantitative easing and raise interest rates beyond 0.25 % in the 17 March Fed meeting, it could push the US into recession and would ensure Biden would lose power in the November mid-term elections. His choice is recession or inflation. My bet is on more inflation and money printing.

Malaysia has held up well during the volatility having risen from 1500 support to 1600. Foreign funds have come back and are net buyers over the last month. The rise in crude oil, palm oil and natural gas are positive to the balance of trade. The energy, finance and plantation sectors are rising.    We are in the last chapter of Covid and travel related stocks are advancing. SATS, the airline caterer is moving. Thai Beverage and Genting Singapore have been rising. A good sign is there was an advert in the Star today by Genting Singapore hiring a wide range of staff. Carlsberg and Heim as well as UPlant were up substantially last week.

Take care, Bill  

 

Germany and France are against this war as well as the majority of Americans. Biden wants to protect the Ukraine border but will not protect the US/ Mexico border were thousands of criminals, drug dealers, human traffickers and unvaccinated cross the border every day. Not only do they freely cross but Biden gives them money, housing and free medical care paid by the long-suffering tax payer.