BlackRock CEO Larry Fink shared some bad news for fellow globalists: the war in Ukraine will put an end to globalization as governments cut ties with Russia.
“The Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades,” Fink wrote in a Thursday letter to shareholders, per the Epoch Times. He noted that the Russian offensive in Ukraine provoked nations to sever financial and business ties with Russia.
“United in their steadfast commitment to support the Ukrainian people, they launched an ‘economic war’ against Russia,” Fink continued.
Fink noted that capital markets, financial institutions and companies have gone beyond government-imposed sanctions, moving to end business and investment relationships as well.
He predicted that the situation will encourage governments and companies to even re-evaluate their manufacturing and assembly footprints and reconsider their dependency on other nations.
“This may lead companies to onshore or nearshore more of their operations, resulting in a faster pull back from some countries,” he wrote.
“This decoupling will inevitably create challenges for companies, including higher costs and margin pressures,” he continued. “While companies’ and consumers’ balance sheets are strong today, giving them more of a cushion to weather these difficulties, a large-scale reorientation of supply chains will inherently be inflationary.”
“Central banks must choose whether to live with higher inflation or slow economic activity and employment to lower inflation quickly,” he urged.
