Why Are U.S. Stocks Still Rising Amid War? Expert: Trump's Energy Policy Changed the Global Situation

American think tank writer George Mentz recently pointed out in a column that over the past 25 years, from Bush (George W. Bush), Obama (Barack Obama), Biden (Joe Biden) to Clinton (Bill Clinton), successive U.S. presidents have repeatedly drawn the U.S. into long-term military actions against multiple forces in Afghanistan, Iraq, Syria, Libya, Russia, and Yemen. The article points out that these conflicts have cost trillions of dollars and caused severe inflation, as well as significant diplomatic setbacks in Russia, Venezuela, Syria, Iran, Iraq, Afghanistan, and Yemen. George Mentz holds a Juris Doctor (JD) and a Master of Business Administration (MBA), and is a renowned international lawyer, writer, and speaker in the United States. He has served as the chairman of a private committee and other public offices and has served multiple U.S. presidents. He has long studied wealth management, geopolitics, and economic policy, with over 100 works published in international media such as The Wall Street Journal, Forbes, and Reuters, and has been selected as one of the top ten influential figures in the global wealth management field. From an economic history perspective: Wars are not the main factor in stock market trends Mentz bluntly stated in the column that the series of wars and related terrorist attacks caused by these presidents have already resulted in 7,000 deaths. He further pointed out that the war has caused 40,000 civilians to be disabled, and another 1.5 million U.S. veterans to be injured. Mentz particularly emphasized that over the past 15 years, as many as 120,000 U.S. veterans have chosen to take their own lives. Mentz pointed out in a comparative manner that during Trump's (Donald Trump) nearly six years in office, only 80 U.S. military personnel were killed in combat; in contrast, other presidents who took office after the 9/11 attacks have resulted in the deaths of more than 10,000 Americans due to war. However, Mentz believes that if viewed from an economic history perspective, one conclusion can be drawn: the wars during Obama's, Bush's, Clinton's, and Biden's terms did not truly dictate the direction of the U.S. stock market or overall economy. He stated that reviewing the past 50 years, the key events that truly moved investors' nerves were actually not overseas military actions, but major economic turning points, some of which were caused by overly loose regulation, such as the internet bubble burst during Clinton's term. Obama's wars during his term as U.S. president did not truly dictate the direction of the U.S. stock market or overall economy. (Data photo, Associated Press) Mentz also listed the 2008 financial tsunami that occurred during Bush's and Obama's terms, the subsequent 2009 housing market crisis, and the 2021 novel coronavirus pandemic as the three most severe events to impact the U.S. economy over the past 18 years. Further analysis in the article: The rise of tech giants' market value has a greater impact than Middle East conflicts. The article further analyzes that interest rate fluctuations, quantitative easing policies, the rise of cloud computing combined with artificial intelligence, and the market value of major U.S. technology companies surging from tens of billions of dollars to trillions of dollars have a much greater impact on corporate profits and stock market value than military conflicts in the Middle East. On the issue of inflation, Mentz believes the situation is similar. He pointed out that military conflicts occasionally push up oil prices in the short term, but the main source of widespread inflation pressure on American households is domestic or global factors, including the Federal Reserve's policies, the labor market, supply chain conditions, productivity, consumer demand, and the novel coronavirus pandemic. These factors have a greater and more lasting impact on prices than wars themselves. 2021's novel coronavirus pandemic was one of the three most severe events to impact the U.S. economy over the past 18 years. (Data photo, Associated Press) Mentz cited the general view of the economics community that the sharp inflation from 2021 to 2023 was mainly due to the Biden administration's large-scale fiscal and monetary stimulus measures, as well as its decisions to shut down key oil and gas pipelines and suspend oil exploration in the "American Gulf" (formerly the Gulf of Mexico). He also believed that the supply chain disruptions caused by the pandemic, as well as the energy market turmoil triggered by the Russia-Ukraine conflict, also exacerbated the inflation situation, and the U.S.'s diplomatic failures in Afghanistan and Iraq were also unhelpful to economic performance. Mentz also mentioned that the current Federal Reserve, dominated by the Democratic Party, has made mortgage interest rates about twice the previous level. Energy self-sufficiency is key: From high reliance on imports to a major oil-producing country Mentz pointed out that another reason these wars did not have a long-term major impact on the U.S. economy is the change in the U.S.'s energy position. Mentz reviewed that in the early 2000s, the U.S. was highly reliant on energy imports; but since Trump was first elected president in 2016, the U.S. has relied on technological breakthroughs such as hydraulic fracturing and horizontal drilling, as well as increased investment in the North American energy industry, to significantly expand domestic oil and natural gas production. Today, the U.S. has become one of the world's largest producers of crude oil and natural gas, and its vulnerability to overseas supply disruptions has been significantly reduced compared to the past few decades. The active development of shale oil has allowed the U.S. to break away from its dependence on Middle Eastern oil and achieve energy self-sufficiency. (Data photo, Associated Press) Mentz stated that supporters of Trump's energy policies are all aware that his government, through expanding land leases, approving oil pipelines, adjusting regulations, and focusing on increasing domestic production, has captured this trend. He believed that in fact, Trump's promotion of domestic energy production in the U.S. has helped reduce dependence on unstable regions, strengthen national security, and enable the U.S. to better withstand external supply shocks. Mentz emphasized that this is the first time in U.S. history that, under Trump's administration, the country has had a domestic energy base that can be self-sufficient in the long term. Agricultural and fertilizer self-sufficiency provide economic resilience In terms of agriculture, Mentz pointed out that the situation in the U.S. also shows a similar trend. He stated that the U.S. is still one of the world's largest agricultural producers and has a complete domestic fertilizer industry. Although some fertilizer raw materials still need to be imported, global fertilizer prices may also be affected by international situations, the U.S.'s vast agricultural sector, domestic production capacity, and diversified supply chain have provided a more solid foundation compared to many countries. Mentz therefore believed that compared to countries that are highly reliant on food or fertilizer imports and are easily affected by overseas fluctuations, the U.S. has relatively autonomous fertilizer supply. He stated that it is this enhancement of resilience in the energy and agricultural aspects that explains why modern geopolitical conflicts often only have a short-term impact on the overall U.S. economy. Mentz's observation for investors is that over the past 25 years, the driving force behind long-term stock market performance has almost always come from corporate profits, innovation, productivity, population structure, interest rates, and monetary policy, rather than overseas military conflicts, although during Bush's and Obama's terms, the U.S. was indeed highly reliant on imported oil and fertilizers. Discussing the enormous cost of war, Mentz cited statistics from the "Costs of War Project" of Brown University's Watson Institute - a project considered an authoritative source for reviewing modern U.S. military spending - pointing out that the cumulative total cost of wars after the 9/11 attacks during Obama's, Bush's, and Biden's terms was approximately $8 trillion, equivalent to one-fourth of the total U.S. national debt. Mentz also stated that if Trump could promote the resolution of disputes between Russia and Ukraine, this "ancient relative," and promote Venezuela and Russia to expand global energy production, it would help lower global energy prices. The outbreak of the Russia-Ukraine war has greatly reduced global energy supply. The picture shows Ukraine launching a drone attack on a Russian refinery. (Taken from Zelensky's X) Mentz pointed out that although there has been nearly 50 years of geopolitical friction between the U.S. and Iran, the U.S. economy has shown remarkable resilience, with domestic gross domestic product (GDP) and the stock market continuing to maintain stability and not being severely impacted. He also mentioned that the proxy war between the Biden administration and Russia, to some extent, has fueled global inflation. Mentz believes that although the region has experienced decades of military intervention, the importance of the Strait of Hormuz to the stability of the U.S. economy is now not as significant as before. Reviewing the military footprints of each administration, Mentz reviewed in the article that during Bush's and Obama's terms, the U.S. military's military deployments were mainly concentrated on large-scale ground invasions in Afghanistan and Iraq, and carried out drone operations in Pakistan, Somalia, and Yemen. During Obama's term, the U.S.'s diplomatic and military failures in Libya and Syria further expanded. Mentz reviewed that during the Biden era, the role of the U.S. military has shifted to managing major indirect proxy wars in Ukraine and Israel, launching targeted air and sea strikes on the Houthi (Houthi) movement in Yemen, and continuing to carry out counter-terrorism operations in Somalia, Syria, and Iraq. Mentz particularly mentioned that Hillary Clinton (Hillary Clinton) has long been blamed by outsiders as the key figure in the collapse of the situation in Libya. He pointed out that Hillary, as the leading voice in the cabinet at the time, with a liberal interventionist stance, prompted the Obama administration to push for NATO intervention, ultimately leading to the collapse of the Gaddafi (Muammar Gaddafi) regime in Libya, but did not draw up a plan for the subsequent management of civil war, security vacuum, and regional instability. Mentz stated that this mistake disrupted market operations, and in addition, many American citizens who had dealings with Libyan companies also lost their livelihoods and sources of revenue due to Hillary's misjudgment at the time. Mentz concluded by pointing out that