Is there courage in capital?

Hussein Shobokshi

There is an old saying that says, “Capital is a coward,” and the intended meaning here is that capital and investment decision run away and are afraid to face any places that have signs of anxiety, turmoil, unrest, violence or wars. . Over time, this phrase has become more like an established scientific rule, but what is happening in the financial markets of the world in general and the markets of the Middle East in particular is worth stopping, considering, and trying to understand and fully understand right and deep.

With Israel’s fierce war on the Palestinian Gaza Strip and Lebanon igniting, and further strikes on Yemen and Iran, and creating a lot of chaos as a result, global markets “embraced” ” those main ones. events, and the stock markets did not shake, and the prices of oil and gold did not rise, and the cost of insurance for commercial shipping did not rise as in the past in similar circumstances .

But what happened was just the opposite: oil and gold prices remained stable, financial markets continued their positive and high performance, and shipping and trade movements remained stable overall.

What is happening now may be a continuation of what happened as a result of the war between Russia and Ukraine, which happened years ago, but it did not have a negative impact on the world economy and it was able to completely neutralize it from the financial markets. This is a completely new global phenomenon that goes against the rule that emphasized the idea that capital is a guard and that it flees from fear, anxiety and turmoil , not to mention destructive and bloody wars.

The relationship between wars and the economy is close, and wars have always been very costly, costly from a humanitarian perspective due to casualties, injuries, and permanent physical and psychological disabilities, and also costly economically, and the cost can economic be direct and clearly visible, such as the destruction of buildings, factories, hospitals, and infrastructure such as bridges, roads, etc., or indirect Its effects are subtle, and their effects are not directly visible, but they are very influential and people can feel them.

When wars break out, the stable economic systems that have been created over the years are disrupted, supply chains are disrupted, the workforce is depleted, there is a state of economic uncertainty, levels inflation and foreign debt of countries involved in wars rising, and people displaced from their homes, factories, and farms, and all this has a great impact on the economy.

This is the traditional view of war and its effects on the economy, but what is happening in Russia and Ukraine and then in the Middle East is forcing economic theorists to reconsider previous rules. Because capital seems to have taken a dose of confidence.