Editor’s note: Before we dive in, I’d like to point out that while the bulk of this podcast discusses the economic impact of the Russia-Ukraine war, we do not view the economics as comparable to the humanitarian crisis at hand. The loss of life and liberty in Eastern Europe is a humanitarian tragedy. Full stop. Although our spotlight here is an economic one, we greatly hope for a swift and enduring end to the current calamity in Ukraine.
In this episode, Aaron and I kick things off with the latest out of the Russia-Ukraine crisis and, specifically, the weaponization of finance: economic sanctions. The U.S. and its allies are fighting Russia the best way we know how to, without risking the loss of life — by cutting Russia’s economy off from the world. This approach will work because ultimately, we live in a very globalized economy with a web of dependencies. And when you remove one from the network, it brings economic death. U.S. markets are seeing a spike in prices because of this. But we believe this is very temporary.
And while some commodities are struggling right now, growth stocks continue to hold up well. We maintain that the most significant fiscal influence of the Ukrainian invasion will be its effect on Federal Reserve monetary policy. It will push a more dovish reassessment of its viewpoint and policy enforcement. Before this war unfolded, the base case was for the Fed to hike rates six or seven times in 2022. Now we’re down to four or five, with the probability of just three hikes gaining traction.
As the Russia-Ukraine conflict expands into cyberwarfare, a major spotlight has shifted to cybersecurity. Aaron and I talk about what to look for in the space when it comes to investing, including price, product differentiation, and fundamentals. We are really bullish on this industry and are doing a deep dive on all things cybersecurity. Those that have sticky contracts with large corporations are likely to be big-time winners.
Another sector that’s been resilient throughout all this? Cryptos. People seem to be flocking to them right now. And I believe their true value is finally shining through. At the end of the day, the blockchain is all about independence and decentralization. It allows the breakaway from relying on a government to sustain your wealth. And with the crisis in Eastern Europe threatening the livelihoods of Ukrainian and Russian citizens alike, it’s become apparent that crypto is the path forward. As always, we are bullish on this, too.
And speaking of independence, it’s time we address the mouse in the house. One way that Americans are feeling the economic effects of the sanctions on Russia are at the gas pump. And this has lit a fire under the energy independence movement. In our opinion, the only true path forward to global energy independence is through renewables.
Lastly, in the vein of Eastern Europe happenings, we touch on “space tech.” Since the start of this war, we’ve seen the deployment of satellites to bring internet services to Ukraine. A major one was Elon Musk’s Starlink. Plain and simple, these innovations serve humans in times of crisis. Aaron and I talk about the other applications of this technology. And with the emergence of cyberwarfare, their functionality will be especially dire from here on out.
