We’re approaching one of the biggest snap back rallies Wall Street has ever seen.
Once Putin’s War is over, everything’s going up. How much depends on the result.
Right now, signs are good. Israel has joined the sanctions regime. China is only going to sell stuff to Putin for cash. But China is in worse trouble than we are. They’re still fighting COVID with lockdowns. Their stock market is a mess. Their property magnates are collapsing. Hong Kong has created a brain drain. Shared prosperity is becoming shared misery. I expect a slow policy readjustment.
Once the war is over inflation will decline. Not magically. Prices are always sticky downward. You don’t cut your price based on costs. You do it when your rival cuts theirs.
Technology remains our best weapon against inflation. My long-term concern remains deflation, and how the gains of technology are apportioned. Fortunately, all those forces who sided with Russia, including our worst oligarchs, are being discredited by events. No one in Washington can see this because they only see today.
The biggest gains will come in international markets, which have fallen hardest during the crisis. But American companies are poised to supply those needs, as we were after World War II. Software is an American lake. Selling it by subscription, through the clouds, makes it affordable as well as scaling every improvement.
Clouds are on the brink of change. It turns out the centralized systems of the last decade won’t work for tomorrow’s applications. We have seen this in the failure of cloud gaming. The only answer is to move those services closer to customers, starting in regional data centers, then local ones. Warehouses, office buildings and shopping malls will become small data centers and fulfillment centers.
COVID reversed the last decade’s trend of people moving into town. Putin’s War is reversing the reversal. There’s a premium for being close to the services of daily life. Cities are coming back, and so is density in suburbs. The edge city of the 2000s, geared to the automobile, is becoming a fruit tree, clusters of density arranged on the branches, built around people instead of around cars.
It’s always darkest before the dawn.
Dawn is coming.
