Table of Contents
The World’s on Fire: Economic Impact of the Iran-Israel Conflict
The world has lost its mind.
Economy was already sinking, this conflict is a literal “fuel-to-the-fire” situation!
Chaos in West Asia means fluctuation in price of Oil. Oil being top most necessity of economic stability. Changes in oil prices has potential of bringing earthquake in World’s economy today. The big bombs of inflation and increased interest rates will start falling soon.
The Domino Effect: How India’s Market is Reacting
India’s sensex has gone down. This was normally expected. It’s like predicting water will get wet — a no-brainer!
It’s the later picture we normally overlook.
We are already fighting inflation. Just a few days back, the US slashed its inflation rate to ease the market. It will not be a surprise if they reverse this decision, and we might soon see similar measures in our country as well.
What does it imply ? Increased Interest rates, unaffordable home loans, interest spikes on credit cards.
You may not see it today, for impacts of inflation come late. The day to day commodity price will start rising, Our vegetable, LPG, cooking oil will start feeling heavy in coming days.
Crude Realities: The Price Surge and Its Ripple Effects
Choose your “pumpkin spice” of the oil world — diesel, petrol, or kerosene! Each one is getting Luxe makeover.
EVs do seem cheaper now, huh?
Since you always need transportation, transportation gets expensive, cargo shipping gets expensive, delivery gets expensive. It means we will seeing fewer of those Eye-bursting Amazon deals now.
Who’s Got the Fuel? India’s Oil Dependency Dilemma
India is heavy importer of Oil. You must have come across Youtube Shorts where, Our External Affairs Minister, S. Jaishankar, was criticized for importing oil from Russia. This year, Russia became biggest exporter of oil to India.
FYI: Traditionally, Iran has been the largest supplier of crude oil, till 2022.
The Red Sea shipping route, crucial for India’s trade with Europe, the US, Africa, and West Asia, may remain inaccessible for longer than anticipated.
This route accounts approximately 50% of Indian Exports and 30% of imports to India.
This recent news talks about, invasion of ships by Iran supported groups, because the ship because they were seen docking at Israeli ports.
Golden Refuge: Why Gold is Shining Brighter in Times of Uncertainty
Don’t forget our sensitive queen, Ms. Gold.
She’s always shining bright when the world’s in the dark!
She has started soaring high with the news of war and uncertainties. Gold touched a new high of ₹78,300 per 10 gm on October 3rd. Prices rose by ₹1,500 per 10 gm compared to the previous day.
Before you go and check your gold vault, I would like to add a few pointers. I am very Thankful, we have home over our head and food on our table. For better or worse, physical gold is a more tangible asset during times of uncertainty. If you could store gold safely, its a better option during this time.
With the last budget update, the cutting rate of sovereign gold bonds and uncertainties regarding the expected value of digital gold is something to think about.
While I do appreciate digital bonds and stocks, I believe gold can also look good on you. If you are someone like me, who likes to eat good things at end of day/meal, we could start taking small sips in between instead of waiting for the end to come.
Staying Grounded: What Can We Do Amid Economic Chaos?
While the government is playing its role, we as citizens should rise to the occasion. The economy is not well, and we don’t know how long this situation will last. Or how many wars we will be seeing in coming days. What can we do? Be conscious about what is going around you. Limit your spending, increase savings. Be positive, help others around you. Don’t follow social media blindly; always seek a second, or even third, opinion..
Stay calm and avoid making hasty decisions. A clear mind helps in making better choices, so resist the urge to withdraw your investments prematurely.