Strategist Brad McMillan: Russia's Isolation Good for U.S.Countries are increasingly disconnecting from the world economy, and that's going to boost the United States, says Brad McMillan, chief investment officer for brokerage Commonwealth Financial.
"Russia is the new poster child for a de-globalizing world, which will result in less economic efficiency and a lower standard of living in many countries," he writes. "Fortunately, the U.S. will be positioned to benefit from this."
Russia's intervention in Ukraine has disconnected Russia from the world economy, McMillan says.
With the world now more globalized and interconnected than in the past, a correction was overdue," he writes. "Russia is one example of this. Another is China, which is attempting to shift from export-driven growth to growth supported by domestic demand."
The United States too is pulling back from globalization, with the explosion of our energy industry and the return of manufacturing here, McMillan says.
The United States should thrive because the advantages of trade flow most strongly to the nations that gain employment through trade, and that has been emerging markets in the past few decades, he says.
While the United States may benefit from de-globalization, Russia's economy is at risk of a downturn from the sanctions imposed by the United States and Europe in reaction to Russia's action in Ukraine, economists say.
Russian banks including state-run VTB Capital predict the world’s ninth-largest economy will suffer a recession, Bloomberg reports.
I find that a bit overly optimistic, but it does underscore that every global situation is a zero sum game that results in the flow of capital, in which some gain and some lose. Whether or not the U.S will benefit from this situation.
Whether action or inaction, both risk a war escalation by Russia and other players, that likely neither side really wants, but due to something stupid, might obligate an escalation in response.
