Russia’s invasion of Ukraine impacted consumers all over the globe — not just politically, but economically. As a result of the war in Ukraine, consumers around the world have experienced supply shortages, increased prices, and growing uncertainty about the future. The global economy was already on shaky ground thanks to the fallout of the COVID-19 pandemic, but the strife in Ukraine could be the final straw that pushes the global economy into recession. For those who are in or near retirement, the daily news is little comfort. Today, the team at Crash Proof Retirement® would like to provide our analysis of the potential economic impacts of the war in Ukraine, and what they could mean for your retirement.
Supply Chain Issues
In a series of executive orders issued by President Biden in March 2022, the import of many Russian products were banned. These products include, seafood, non-industrial diamonds, oil, liquefied natural gas, and coal. Prior to that, Russia banned the export of more than 200 products in response to economic sanctions stemming from the invasion of Ukraine. With the global economy already suffering from supply chain issues, this trade war could not have come at a worse time. Many of the products that consumers depend on are currently in short supply, and it is not known when they will return to store shelves.
Due to the policy decisions of the Biden administration and congress, inflation soared to its highest level since the 1980s in early March. New supply shortages resulting from Russia’s invasion of Ukraine have exacerbated the issue and is likely to push inflation even higher. Russia’s role as an oil supplier was limited as western nations banned Russian oil imports, a fact that has contributed to higher gas prices in the United States. In addition, Ukraine is a major supplier of wheat and other agricultural goods. The Russian invasion has caused the price of commodities to soar around the world, raising concerns about how global food shortages will impact the stability of the international community. These are just a few examples of the issues impacting rampant inflation, and how consumers are paying the price.
When the Russian invasion began, the United States Federal Reserve already announced a series of interest rate hikes, starting in March of 2022, that were intended to curb inflation. While the situation in Ukraine has raised alarm bells at the Fed, they currently have no plans to change course on their announced interest rate hikes. In the future, this will mean that borrowing money will become more expensive for the government and consumers, which will likely have a direct impact on the stock market, causing the indices to fall.
Russia’s Debt Problem
Western economic sanctions and the freezing of around $315 billion in Russian assets has put the country in a difficult financial situation. Russia narrowly avoided defaulting on their debt on March 17th when they repaid $117 million in interest payments, but creditors wonder if Russia will be able to make future payments. Some experts have pointed to evidence that the United States could force Russia to default on their debt by not accepting payments. Even though Russia managed to stave off default, their strained resources have made their economy unsustainable. A Russian debt default would certainly send ripples through the global economy, which may exacerbate economic issues around the world.
Finding Financial Security in an Uncertain World
As Russia’s war in Ukraine continues, the threat of a global recession continues to be a black cloud on the horizon. Anyone who is currently retired, or who is planning to retire in the next few years should either protect their nest egg or risk a global recession robbing them of their hard-earned savings. If you are invested in the high-risk securities industry for your retirement — and that includes stocks, bonds, and mutual funds — your nest egg is at risk. If you are concerned about the security of your retirement investments, there is something you can do.
At Crash Proof Retirement®, we have already helped more than 5,000 consumers find a safer way to invest for the future. The proprietary Crash Proof Vehicles that make up our Crash Proof Retirement® System are not only guaranteed to prevent you from losing your principal investment during a stock market crash, they also credit interest at rates comparable to risky securities-based investments. No one knows what the future will hold for Russia, Ukraine, and the global economy, but when you utilize Crash Proof Investments, you can be certain your nest egg will be protected. To learn more about how the exclusive Crash Proof Retirement® System can protect your retirement fill out the online form on our contact page, or call 1-800-722-9728 and schedule to attend our next Crash Proof Retirement® Educational Event.