Putin Changed the Inflation Outlook Dramatically

  1. There would be a gradual decrease of “base effects”: the drop of prices in 2020 and part of 2021 was followed by a sharp increase due to return to normal. This effect creates temporary inflation.
  2. A gradual return to functional global supply chains would reduce production cost problems and supply chain problems, thus reducing cost and inflation pressures.
  3. A reduction of the labour shortage for many reasons: increasing immigration, the end of federal income support programs that may decrease incentives to work, a drawdown of private savings, etc.
  1. Oil and gas (Russia).
  2. Grains, such as wheat, maize and others (Ukraine and Russia).
  3. Seeds (Ukraine).
  4. Metals (Ukraine and Russia).
  5. Fertilizer (Russia).
  1. Russia will “take over” Ukraine, but it will be hell to stabilize and keep due to strong (and understandable!) resistance from Ukranians, and the sanctions will bring enormous economic costs and political pressure on Russian leadership, but they are unlikely to back down.
  2. Russia will attack some other country, probably Moldova, but maybe even a member of NATO (Poland, Lithuania, etc.) and this will only add to existing pressure and potentially get very ugly.
  3. Ukraine will give East Ukraine to Putin to de-escalate and get out of the hell of the constant bombarding of cities, infrastructure, and villages, and people.



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Pascal Bedard

Pascal Bedard


Sharing thoughts on economics, finance, business, trading, and life lessons. Founder of www.PascalBedard.com