May 22, 2024

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“Russia has put an end to globalization,”

© Reuters.

By Laura Sanches at in Spain – “The volume of Russian stocks will spread over the next few decades and represent a turning point in the global order of geopolitics, macroeconomic trends, and capital markets.”

That’s what BlackRock (NYSE:) CEO Larry Fink showed in his annual letter to shareholders Thursday, according to Market Watch .

“I still believe in the long-term benefits of globalization and the power of global capital markets. But the Russian invasion of Ukraine ended the globalization we’ve seen over the past three decades,” warns the CEO of the world’s largest asset manager.

According to Fink, the disconnect between people, countries, and companies began with two years of the pandemic. This has left many communities and people feeling isolated. I think this has exacerbated the polarization and extremist behavior that we see in society today,” Fink says.

For the manager, this “disengagement” will increase costs and put pressure on margins. Fink cautions that “while corporate and consumer balance sheets are strong today, giving them more protection to weather these headwinds, a large-scale reorientation of supply chains would be inherently inflationary.”

The director also considered the possibility that the war in Ukraine could accelerate cryptocurrencies as countries reconsider their reliance on traditional currencies. “A carefully designed global digital payment system can improve cross-border settlement of transactions, and reduce the risks of money laundering and corruption,” he says.

Finally, he makes a point about the energy sector: “Higher energy prices will also significantly reduce green premiums for clean technologies and enable renewable energy,” he concludes.

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