Markets remain volatile, but the S&P 500 is up well above the Ukraine Invasion low and it has recouped all the losses since the week before the invasion.
There’s always something to fear and right now a lot of people are concerned about the “petrodollar”. As I’ve discussed years ago in the blog and just recently in a podcast, the petrodollar isn’t a “thing”, it’s simply a term to describe a category of Oil purchases.
I won’t belabor the point as to why the economic impact (if any) would be limited if oil is traded in a currency other than the US Dollar, because the facts won’t change anyone’s mind. A country’s currency derives its strength from the country’s productivity (products & services). The USA is extremely productive, the below chart highlights just one of the country’s many outputs- OIL. Note how in recent years, the production of domestic oil far out paces imports. This is essentially why the mythical petrodollar is irrelevant.
The really good news is that the technology which enabled the USA to be the world’s LARGEST oil producer is also the technology that’s energizing the country’s entire economy. Long term the future is very bright for the United States, North America, and most of the Western Hemisphere.
But don’t be too optimistic, always invest with caution.
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