The world is in chaos, with the situation changing by the minute. As I write, President Trump has announced a deal with the Ayatollah, but how long will this last? And from further military conflagrations to certain commodity prices rocketing and stock prices falling, just how much can we be expected to take on and fully understand?
None of us know what is actually going to happen next. Will it be some hideous form of Armageddon? Or rather yet another economic, political and military crisis that our leaders will fumble our way through? If you are in the former camp, then further supplies of whiskey and cognac may be required. If, however, you feel that despite the hyperbole from some quarters, we will work our way through, then we should sit down and plan for our assets to be controlled and protected in the best way we can.
The stock market indices have shot up and down, but I have had to point out to some who should know better that so far, such paper losses have not even fallen back to where they were at the beginning of the year, to say nothing of the fact that real investing success comes from compounding interest. However, there is a lot more to work our way through before we see and end of this maelstrom.
In the UK, what was most depressing this week was our apparent blind stupidity in not anticipating this or at least making some preparation for the rising tide of war. We have our gallant Royal Navy where we have a total of 60 ships (a good proportion of which are perfectly designed to pick up people from rubber dinghies in the Channel) backed up by 134 Admirals.
We have two aircraft carriers, although no obvious signs of planes, and a destroyer which is not quite ready yet. HMS Dragon looks like an excellent vessel but as a fleet of one may be somewhat challenged.
So how should Europe and the EU address the coming storm? The impact of our latest war, when added to the Ukrainian conflagration, is going to be far greater than we have seen to date. This isn’t just about oil and gas, but also other less obvious areas such as helium and urea. These won’t have the same profile as other commodities as we don’t need to buy our own helium, but what this means is that the supply chains for other key areas will be disrupted both in delivery and also, more vitally, in price.
I have mentioned before the effect of President Trump’s disruption of supply chains backfiring on him because of politicians with a greater appreciation of risk, such as Mark Carney of Canada. Mr. Carney’s reaction to the Trump tariff bluster was to not weep and plead at the feet but rather just change supply routes to more reliable business partners.
Here, then, is the first area that Europe should address. If the result of the Gulf War is the threat to, or even the actual constriction of supply, then the countries of Europe should look to be willing and more reliable partners for Prime Minister Carney.
The next area for Europe to address is the need for clear leadership. Sadly, though, here the EU comes across as a large operation run by committee. That might do for a tennis club, but not when maintaining economic strength in the face of nations who will not care about your niceties. Europe may see itself as being pleasant, polite and reasonable, but that counts for little against aggressors who just see it as being weak and ineffectual. Think of 1939, when a UK Prime Minister returned with fair agreement (which it wasn’t) from a Nazi leader who saw his adversary as precisely that.
The EU and other non-members need to find a backbone to show strength and determination in the face of political adventurism on one side and military bullying on the other. This will mean a fundamental change in attitude to find an agreed way forward and the strength of character to act upon it.
Currently we cannot even agree on the sanctions on Russian oil, so what happens when fertilizer supplies are depleted, and costs raised? This will not just be an issue for Europeans but have a far further reach for countries like India and Thailand which depend upon such agricultural supplies. What position then for the developing world, which will already found that the aid from the developed nations seems to have evaporated in the heat of war?
Time for leadership, not leaderlessness. The alternative will not be pleasant.