Tags: Obama | foreign | policy | Carter | stocks

Obama's Foreign Policy Fecklessness Could Doom Stock Market

By    |   Wednesday, 05 Mar 2014 07:08 AM

Foreign policy has been difficult for the Obama administration. In Libya, administration officials noted the president was leading from behind. In Syria, Secretary of State John Kerry threatened to conduct an unbelievably small attack before Russia brokered a deal that allowed the civil war to continue without interruption. Iran is also benefiting from a deal that allows it do it as it pleases while ignoring U.S. interests.

With the crisis in the Ukraine, the administration had another chance to respond with strength, but instead the president promised to "stand with the international community in affirming that there will be costs for any military intervention in Ukraine." This comment is consistent with a foreign policy designed to avoid tough decisions.

Investors should be nervous about the lack of leadership that has become a part of the Obama administration. In the late 1970s, the stock market struggled as President Carter struggled to provide leadership when the Soviet Union invaded Afghanistan and Iran held American hostages for more than a year.

During Carter's presidency, stock markets struggled in the long term. The Dow Jones Industrial Average closed at 968.67 the day before Carter's inauguration and rose to 970.99 on his last day in office, gaining 0.24 percent during four years.

Carter's ineffective foreign policy was not the sole cause of the stock market's performance. His foreign policy contributed to inflation by ignoring unrest in the Middle East that led to increased oil prices.

By contrast, strong leadership on the world stage provided by Ronald Reagan in the 1980s coincided with the greatest bull market of the century.

Obama's approach to foreign policy is a threat to the bull market in stocks that should not be ignored. Global events can quickly spiral out of control without leadership and result in a bear market. Until someone leads from the front, the risk of a global crisis that ends the bull market is high.

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MichaelCarr
Obama's approach to foreign policy is a threat to the bull market in stocks that should not be ignored. Global events can quickly spiral out of control without leadership and result in a bear market. Until someone leads from the front, the risk of a global crisis that ends the bull market is high.
Obama,foreign,policy,Carter,stocks
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2014-08-05
Wednesday, 05 Mar 2014 07:08 AM
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