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Originally Posted by pmulcahy11b
How has the Twilight War impacted the international stock market and banking system?
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I could write a book on this, but it would be a long and boring book!
A few thoughts...
The effect would not be uniform. Germany's economy would be among the hardest hit... mobilization, absorbing the east, war damage, the cut off of energy from the USSR and the closure of the Italian, French and Belgian borders would each individually be severe hits. On the other hand, the US, Australia and Canada would initially be less severely affected, immune from physical damage but burdened by the massive government spending and mobilization adjustments. In this environment I could see a reversion to fixed exchange rates to lowering the damage to Germany from international investors fleeing to more attractive markets. Within non-front line economies the winning sectors would be defense (obviously), transportation equipment (trucks, shipbuilding, aircraft) and construction (for the facilities needed for mobilization). Others might be parts of hospitality (as people flee the cities) and food processing. Sectors that would be suffering could be insurance, ship operators and airlines (balancing losses of assets with sky-high demand and premium rates by government buyers), entertainment (although we know that TV sitcom production continues up to and past the TDM!) and international travel and trade. Commodity markets would be volatile as the war at sea disrupts normal trade patterns, another area where there might be government intervention and price controls. In the US we might see an increase in government deposit insurance for individuals and small businesses to shore up the banks.
All these combine to create a really volatile stock market. Rest assured, traders are going to be active trying to make a profit from each up and down!