Money Rehab with Nicole Lapin - The Russia-Ukraine Conflict Will Affect Your $$$. Here’s How.

Episode Date: March 16, 2022

The impact of the Russia-Ukraine conflict is wide-reaching; so wide-reaching, in fact, that the conflict will reach its way across borders and right into your wallet. Nicole unpacks the five ways you will be affected. See omnystudio.com/listener for privacy information.

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Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. There are plenty of reasons to feel gratitude to be an American in a globalized world.

Being interconnected means we encounter people, stories, and cultures we might not have experienced in a more isolationist time in our global history. It also means that we have increased involvement when a country is in crisis. First, because of how our countries are interconnected financially, despite being separated by borders. Second, and I would argue most importantly, we are able to hear stories from people who are in crisis and decide to come to their aid. The impact of the Russia-Ukraine conflict is wide-reaching and has consequences for geopolitical, social, and of course, economic affairs. So wide-reaching, in fact, that the conflict will reach its way across borders and right into your wallet.

Here are five ways that the Russian-Ukraine conflict could affect your finances. Number one, higher gas prices. Russia is one of the world's top oil-producing countries, second only to Saudi Arabia. The world's benchmark of oil prices, Brent crude, increased 3.5% to $101.39 a barrel, the highest price it's reached in eight years. In the financial world, Brent crude is a common metric, but it's not a common benchmark for those of us outside of Wall Street. I mean, how often are you buying a barrel of oil? I'm going to go out on a limb here and say rarely. But one thing I'm sure you have experience with is going to the gas station and filling up your gas tank.

And you will certainly feel rising prices at the gas station. At the time I'm recording this, the national average for gasoline is $3.61 a gallon. That's up 80.08 in a week and $0.25 in a month. Number two, hiked grain prices. Ukraine is one of the world's largest producers of wheat and grain. Together, Ukraine and Russia produce about 14% of the world's wheat supply. It's expected that prices of wheat will rise, which means Americans will see higher grain prices at the grocery store, but also a price hike for products that require grain for production, like beer, bread, pasta, birthday cakes, and so on. Number three, increased crypto volatility. Bitcoin dropped 9% to $34,584 after Putin ordered the invasion of Ukraine. This tumble was likely caused by the same forces that have affected the stock market this week, but I'll get to that in

point number four. However, we can expect to see crypto prices experience an upswing as the currency is used in unique and unexpected ways, like an incentive for Russian soldiers to surrender, direct financial support for Ukrainian troops, and frustratingly, although increasingly less likely, a potential workaround for Russians to avoid sanctions. And so on Monday, February 28th, Bitcoin jumped 10% to above $41,500, a notable high in recent weeks of disappointing lows. Number four, stock market dips. Sadly, no one has a crystal ball that can predict what will happen in the stock market. But what we can predict is that the stock market likes predictability. that the stock market likes predictability. In situations where the future is uncertain,

like during a pandemic, a difficult presidential election, or a geopolitical crisis, the stock market dips. The Dow, an index that financial experts often use to measure the health of the stock market, sank 7% compared to the beginning of the year. This doesn't mean that you should panic, of course, and cash out on your investments. To date, the stock market has rebounded from every single global crisis in U.S. history. This is just the pattern of the market, which leads me to number five, increased gold prices. During times of global uncertainty, risky investments like stocks or crypto tend to tank while safe haven investments tend to rise. Safe haven investments include bonds and notably gold. This crisis is no exception. Recently, gold hit an eight-month high. Now, I would not use this trend to argue that you should buy gold now.

Remember, we like to buy low and sell high, not buy high. But whether you decide you want to buy some gold now, wait until the price dips, or try your hand at dollar-cost averaging, use this as a proof of concept around why you should have some gold in your portfolio. For today's tip, you can take straight to the bank. We should be aware of how this situation affects us so that we can weather our economic storm together. However, to get back to my earlier point, with the way the world is connected right now, we are closer than ever to our fellow human beings, regardless of whether we share a national border. So as you're taking care of your financial self, I urge you to find some time to help others

who are affected. If you're interested in supporting the people of Ukraine, you can find the resources linked in the show notes. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etor and Will Pearson. Our mascots are Penny and Mimsy. Huge thanks to OG Money Rehab team Michelle Lanz for her development work, Catherine Law for her production and writing magic,

and Brandon Dickert for his editing, engineering, and sound design. Shell Lanz for her development work, Catherine Law for her production and writing magic, and Brandon Dickert for his editing, engineering, and sound design. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.