Dear Readers,

Are we heading to a recession due to the ongoing global war and the global macro economics. 

While all the technological revolutions such as Artificial Intelligence (AI) are emerging on one front, a dark cloud in the form of a Global Recession looms over us on the other end. 

This is being cautioned by the global financial experts. 

At this point in time, the big man Larry Fink has sent shockwaves across the globe during an interview with a news agency. 

Larry Fink is the CEO of BlackRock, the world's largest asset management firm and he oversees assets valued at approximately $14 trillion.

With the exception of the United States and China, this figure exceeds the Gross Domestic Product (GDP) of any other nation in the world.
When Larry Fink voices an opinion, it is never merely a personal view; it serves as a directive for the global market.

In his recent BBC interview, Larry Fink’s demeanor expressed his certainty of this financial catastrophe.  foretelling a catastrophe and declared: "A Global Recession is inevitable."

He did not just issue a warning; but he effectively articulated a death warrant for the global economy.

The conflict involving the U.S., Israel, and Iran has effectively paralyzed the Strait of Hormuz—a vital artery for the entire world.

This maritime route, through which one-fifth of the world's energy supplies pass, has now been transformed into a battlefield.

The International Energy Agency (IEA) has characterized this situation as "the worst disruption to oil supplies in history." In his speech, Larry Fink put forward a dire prediction:

"Even if the war were is heading to a ceasefire, if Iran continue to pose a threat in the region, the price of a barrel of crude oil would reach $150."

If the price of crude oil would rise to $150 per barrel, it would definitely trigger a chain reaction within your country's economy. This is no ordinary price hike; it is poised to become an "inflation bomb" that will impact every single one of your pockets.

In countries like India and Sri Lanka, a rise in petrol and diesel prices immediately triggers an increase in freight charges for trucks and cargo vehicles.

Consequently, the prices of vegetables, fruits, and essential commodities transported from villages to cities could be hiked by 20% to 30%.

If fuel prices soar, agricultural machinery will grind to a halt. As fertilizer prices skyrocket, the cost of even a single loaf of bread could triple, leading to a food crisis. 

There may be a position that people can't able to afford the electricity bills, massive industrial complexes across Asia and Europe may force to shut down. Hundreds and thousands of people may loose their jobs.

To prevent and address this inflation, the banks will raise interest rates. Everyone from homeowners to small business owners will find themselves then pushed into debts. 

Larry Fink’s message is clear: even if the bombs stop falling, the world will be forced to shoulder a permanent economic burden under the pretext of the "threat" posed by Iran. Peace will exist in name only; the people's wallets will continue to be drained dry.

The moment this interview was published, the global markets froze in panic.

The war may come to an end, but the misery of an economic recession is destined to persist.

Even after the war gets over, the fear surrounding Iran will remain afresh in the markets. The global shipping companies will continue to be fear of utilising the Strait of Hormuz. Consequently, insurance premiums will be shooting up and will not come down. The additional security costs in this region would be incurred for each vessel will ultimately be passed on to the common people, which would be reflected in the price of the goods that we  purchase.

There will be considerable amount of time to reactivate ships that have been idle for months, empty warehouses, and halted factories. This delay will create shortages of goods and keep prices elevated.

In the post-war environment, nations will begin stockpiling oil to ensure their future security. With demand high and supply low, the price of a barrel is likely to persist at the $150 mark even after the fighting has ceased.

With the Major investors such as Larry Fink will hesitate to invest in new projects, citing a lack of political stability. A decline in investment will lead to a reduction in employment opportunities, thereby pushing the economy into a state of stagnation.

Once the war concludes, governments will print fresh currency in an effort to revive the economy.

That newly created money will, once again, flow first into the hands of major investors like Larry Fink.

They will utilise those funds to acquire assets that are currently trading at depressed valuations.

Meanwhile, due to the ripple effects of this inflation, ordinary people will continue to purchase goods at very higher prices which would worsen the situation. 

So, let's fully prepare for this global melt down and rebalance our investment portfolios as well.