This isn't a financial blog, but the current state of the world financial markets has us pondering volatility, safe havens, and of course, luxury real estate.
Anyone reading the headlines (or filling their gas tanks) in recent days knows that the price of oil has plunged. OPEC and Russia have stuck to their guns and have not cut production.
The currencies of oil producing nations have taken a hit, the most obvious being Russia which has seen a massive increase in interest rates from 10% to 17% and seen the Ruble tumble sharply against the US Dollar. It is being reported that many western banks are suspending USD/RUB trading and closing all open positions (ouch!).
In the Middle East, equity markets are taking a big hit.
Here at home, some are speculating that U.S. and Canadian oil sands, shale oil, and other high priced petroleum ventures will be priced out of the market at these levels. The Financial Times reports that ,"Oil price fall threatens $1 trillion of projects."
While we might be enjoying the numbers we're seeing at the gas pump, the global commodity, equity, and currency markets are experiencing high volatility, if not outright turmoil.
Obviously what this means on a practical level depends on one's positions and exposure. I think it is safe to say that we will being seeing a global flight to "safe havens" and that's probably not a bad thing for luxury real estate. Interesting times...