The Global Economy As We Know It Is Coming To An End

 

There are people who proclaim loudly at the start of practically every war, including the current one in Ukraine, that it will be finished soon and that business can resume as usual. They are almost never correct. While no one can predict the outcome of the Russian-Ukrainian conflict, the economic battle that is taking place in the background is extremely likely to destabilize the current global trade system. It was just a little more than a century ago when a global commerce system was destroyed. The dominance of the British fleet on the high seas and the reach of the British Empire from the late 1800s to the advent of World War I established an era of stability and connectedness that was very favorable to global trade.

Then came World War I, which shattered such stability and connectedness. Later, the Great Depression triggered a global trade war that wiped out the international trading system's vestiges. The world did not establish a free-flowing economic system until the conclusion of the Cold War, which had divided the world into two commercial blocs for nearly 50 years.

Even in the face of crushing economic penalties, Russia is unlikely to just back down. Things have gone too far, and the Russian leadership has placed far too much emphasis on its claim that Russia requires its own area of influence free of NATO troops and missiles. Threats to Russia's "near abroad," as it has been dubbed by the Russians, must be avoided.

Sanctions against Russia are difficult to track, vague, and constantly expanding. Their ramifications, on the other hand, are obvious. The majority of the globe will be obliged to drastically reduce its trade with Russia because to pressure from the United States and European countries.

Russia, on the other hand, has its own trade weapons, since the country is still the world's second-largest producer of both oil and natural gas, after the United States, according to the US Energy Information Administration. Russia, on the other hand, is the world's greatest natural gas exporter and, depending on who you ask, the second- or third-largest oil exporter. These exports are extremely important to Europeans. Any drop in Russian exports is likely to generate price increases. This is precisely what has occurred.

Russia is also one of the top two producers of palladium, which is utilized in a variety of applications including catalytic converters and electronics. Platinum is the same way. Russia is a major producer of nickel, cobalt, uranium, gold, silver, lead, zinc, and iron, among other metals. A short look at Wikipedia's "Mining Industry of Russia" page demonstrates how important Russian mineral production is in global markets.