Centuries of business has told us that trade is the key to economies growing and being therefore of benefit to the people so doing those trades. That is to say, whether such trade is done intrastate, or interstate, within one country, or globally, the purpose of trade, is for both sides of that trade to benefit; in which, quite frankly certain products, minerals, labor, food stuffs, and the like, are cheaper or more abundant or more efficient in one locale than another—thereby leading to not only a fair trade between those parties, but the very reason why such transactions are so done.
Before the era of global markets and global trade, what happened within one country or one locale, obviously only affected that one particular place, for better or for worse, and thereby had no influence or affect upon another distant place or locale. In today’s world, the largest economies in the world, are frequently intimately globally connected, which signifies that because of that interdependency, what happens to one big player within that construct, is going to have ripple effects, for better or for worse, to everyone else. In other words, in a true global market, when bad storms come, there really isn’t going to be any safe harbors, because of that interconnectedness. This truly does signify that in today’s global market there aren’t any safe havens for those that invest in equities, businesses, and the like, for global trade, tariffs, wars, and monetary policy are all integral to whether one’s investments continue to do well or whether they do poorly.
Additionally, what so happens in economies has a lot to do with the confidence level as well as sustainability that business as usual, will or will not continue as normal. Further to the point, nations as well as multinational corporations, have bills and responsibilities that they must so attend to, and when there is a noticeable fear in the air, about this or that, justified or not, each of those parties has a tendency to desire to reduce their personal leverage or exposure to financial markets, or basically any market or vulnerability, that could adversely impact their nation or business, in a substantial way; and when these markets are vulnerable on a global scale, this obviously can easily turn into a situation in which something that is sort of bad, devolves into something that could reduce the edifice that nations and companies depend upon, to ruin.
All of this thus signifies, that highly unexpected and unanticipated changes to business as usual, can easily create a construct in which there is a liquidity squeeze and thereupon a rush to a safe haven; of which, in all likelihood these havens themselves, aren’t even necessarily all that safe or stable. At this point in history, we are essentially all in this together, and when nations and mega-corporations get nervous, and thereupon find themselves under siege, all sorts of bad things can and do happen; in which, even the most neutral of countries and societies, are themselves subject to being towed under, for when unsuspected chaos so occurs, it can all so suddenly change from civil to uncivil, in a blink of the eye.