The Threat of Protectionism

QUESTION: Marty:

I read you every day and I am one of the fortunate people to have a financial advisor that attends your Conference every year in the US.

I am wondering how Airbus will be affected in the future as the Euro further declines.

Thanks, RM

ANSWER: This is one of the aspects that caused the protectionism during the 1930s. As the turmoil in Europe unfolded, capital fled to the dollar pushing it higher. This invoked protectionism also propelled by the decline in commodity prices. The protectionism began with the agricultural sector and then spread to other areas.

As the dollar is pushed higher, we will see protectionism rise again probably 2021-2022. European companies that do not have professional hedging departments will suffer greatly.

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