VIDEO: How War Effects the Economy

COLUMBUS, Miss. (WCBI) –  In a press conference, President Trump threatened retaliation if North Korea were to attack Guam.

These growing tensions are making some wonder ‘Will a war with North Korea happen?’

“They will be met with fire and fury.”

That was the response by President Trump to the latest North Korea bombing threat.

From a historic and economic standpoint, something usually comes around to send the economy into a downturn.

“There’s always an event that goes on, major headlines, major events. It could be a war; it could be an economic crisis. It could be many different things that may cause an investor to think, you know, ‘What’s going on in the market? What going on with my money?'” said financial adviser for Financial Concepts, Scott Ferguson.

A prolonged war on the Korean peninsula would have both immediate and delayed effects on the global market.

“South Korea will be affected greatly through that. South Korea makes up roughly 2% of the global GDP, so as there supply chains and economics are affected by that war directly, right there, you could see that ripple across through the global economy,” said Owner and President of JTS & Co., Jeff Farnham.

The economy is a constant roller coaster, going up and down.

It’s been that way for decades, especially in times of war and political turmoil.

“You go back to the end of World War II, you’ve had 13 bear markets. A bear market is when the market is down 20% or more. So 13 times, or on average once about every six or seven years, you have these bear markets come along. So you know when you’re factoring in your financial plans for those long-term goals, there’s going to be ups and theres going to be downs all through those years,” said Ferguson.

Investors aren’t the only ones who can lose money from this.

A prolonged war with North Korea affects gas stations, grocery stores, and especially interest rates.

“As you look at economies, if they start to falter or struggle, then that affects everyone’s pocketbook in some form or fashion. You know, whether it’s affecting manufacturing exports, where they can’t get things out in across the globe. It is going to push prices up? Is it going to make it more costly?” said Farnham.

With the economy on the line and now some support from Japan, we can only hope that a war with North Korea will only be a thought and not a reality.