What's Important Isn't About The Markets or Even About Inflation

Every once in a while, it's important to step back and figure out what's important - as in really important. It's time to do that, and it isn't about markets or even inflation.

Sure, we've already established that inflation is and will be more important than the markets. What they do matters to our investments, of course. Even in the current regime of the Bear, we want our investments to first, not lose a lot, then - without taking on undue risk- eke out some gains. But as we've seen with inflation, if it continues for a long time (an it might) or if it steps over the borderline of our current inflation rates into - dare we say it? - hyper-inflation - keeping our purchasing power to any reasonable degree will not be an easy task. Indeed, even if we throw everything we've got at it, it's unlikely to preserve our purchasing power.

It's a big deal. But it's not as important as...

War

Some claim our government has virtually always been involved in some war or wars going back to WWII. There's truth in this. But not like what we've started to see lately.

There's the invasion of Ukraine by Russia. And recently the attack by Hamas on Israeli civilians, leading to what is now called the Hamas-Israeli war. The thing about both of these that distinguishes them from most of those wars since WWII is the danger of the conflict spreading.

We say "most" because one can argue that the war in Vietnam did indeed spread in the region. And one can argue that the war in Iraq spilled over into other areas. As for the war in Afghanistan, it didn't seem to ever threaten any widespread contagion. But even the first two never really caused folks to bring up what once seemed unfathomable....

World War III

While some of us have lived through the Cold War and the era of MAD (mutual assured destruction) that, in its early years, had us fearful of worldwide annihilation, all of that seemed to disappear in the years before and following the demise of the Soviet Union. But things have taken a dangerous turn lately.

We won't get into the typical analysis/claims about about how our current situation will affect our investments. It will. But before we take time with that, let's not let the horror of the spread of either or both of these wars escape our attention. The death and destruction in Ukraine is already beyond what we can imagine. And what may happen if Israel does indeed send ground troops into Gaza? 

Instead of worrying about our money, perhaps we ought to at the least take some time to pray that these wars do not trigger an ever-widening area of war. And we ought not discount the possibility - incredible as it may seem - of some sort of World War III.

We say "some sort" because just as World War II was not a carbon copy of World War I, and neither unfolded according to those who planned the initial attacks, so too we don't know exactly how a World War III will unfold.

And we also do not want to discount the claims of those who study what are known as "cycles." Since we have read the works of some of these folks, we can tell you that they seem to agree that this decade will be a decade of war, according to cycle theories. And these folks have been predicting this before the first Russian tank crossed the Ukrainian border. Once that happened, though, they were quick to alert us to what they had been saying all along. 

Big, widespread war tends to occur in cyclical patterns. And that's the thing that we find most disturbing. We're there now.

Outside of the recommendation to pray, we have no other suggestions for now.