The fine strategist Alessandro Fugnoli was right once again when in recent days on his blog "Il rosso e il nero", published on the Kairos website and relaunched yesterday by FIRSTonline, he recommended keeping an eye on geopolitics, and in particular the moves of Saudi Arabia in the face of Iranian peace and the decline in oil prices, to understand the trends of the financial markets. Central bank strategies are today more essential than ever to decipher the future of stock exchanges, bonds and currencies, but they are not all and the variables that can influence the expectations of investors and savers are endless.
But what will happen now to the stock exchanges, government bonds and the euro after the terrorist massacre in Paris? It would take a crystal ball to know, but there is no doubt that in a few hours the economic and political scenarios have at least temporarily completely changed and that, together with the barbaric contempt for human lives and for the freedom and democracy of the In the West, the ISIS offensive has also dealt a severe blow to the confidence and expectations of families, businesses and the markets.
Let's hope it doesn't repeat the effect of September 11, when after five days of closure, Wall Street lost more than 7% when it reopened. And let us hope that the wisdom of institutional investors will be able to prevent panic selling.
Three things, however, have already been clear. First: it is useless to delude ourselves that the financial markets can return to normal in a few hours. Second: investor confidence has suffered an unexpected attack and it is hard to imagine that the shield of the ECB and Quantitative easing is enough to reassure the markets, even if in emergency situations like this the tools put in place by Mario Draghi are even more yesterday's true lifeline. Third: the stability of the markets will depend on the speed and effectiveness of Europe's response to terrorism but also on the foresight of central banks and institutional investors.
Understanding that Isis has brought war to our homes and that unfortunately it won't be a blitzkrieg is already a step forward, but the new awareness of the mortal danger that the massacres have given Europe is only the premise and not the answer to the emergency. After being divided over the economic crisis and immigration, it would be unforgivable for Europe not to rediscover strength and unity in the fight against the monster of international terrorism and not to understand that the complexity of the challenge no longer allows anyone to play games. The game is too complex and the stakes - that is, the defense of freedom and democracy against barbarism - too high to be able to rely on apprentice sorcerers.
