Political stresses are undermining the West. While Europe bickers and America reinvents itself, the Asian century has begun. Yet, Modi and Xi embracing in Tianjin does not herald a new China-India axis, but that India has moved firmly into the new Asia camp. How these two nations compete will be the key to 21st Century investment opportunities.
Trade tensions are set to dominate this week – particularly for Europe and Japan. While Trump upsets his allies, the global nexus is moving to the wealth concentration in South East Asia and the future evolution of tech – nothing lasts forever.
Trump has been sending “for your immediate attention”, letters to former friends and allies hiking tariffs and threatening retribution if they retaliate. Yawn. Who cares? The Global economy gets it. America is no longer America. Global trade is shifting. Excellent – that spells opportunity!
The market is probably overstressing on Trump – but he does make a lot of noise. A bigger danger may be the broader signals and the future of the USA as economic hegemon. At a time when the US Debt clock is spinning so fast you can’t read the numbers, could the USA withstand a Dollar, Treasury and Political Competency Crisis? Let me explain by taking you to the top of a very steep mountain.
How sustainable is the Trump effect? The world is reeling from his demands and threats to trade. Trump’s power is to shock. Yet, we become inured to shocks, and work our way around them. How long before Trump’s backers and supporters realise that? And he hasn’t even started on China!
The weekend’s events in Syria highlight dramatic and swift change at the core of the geopolitical instability that’s defined the last few years. The cost in blood from conflict has been horrendous, but from a market and stability perspective there is now more to be positive about. Russia and Iran’s defeat in Syria could even trigger global recovery!
China issued $2bln of Bonds via Saudi Arabia last week. Some think it’s part of a malign plan for China to disrupt the global dollar bond markets. It may be the trigger for a dramatic rethink and recalibration of how global markets finance future credit. As geopolitical flux deepens, how might a new bond markets evolve?
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