Geopolitical and Macroeconomic Trends

Global Macroeconomic Trends

1. Rise of emerging economies slowed down by liquidity squeeze
2. As intra-Asian trade weakens, Latin America and Middle East eye a potential revival. Mercosur may see a “breaking up”
3. Fragility of paper-based Monetary System: Risks of Deflation, Price Stickiness and Hyper-Inflation are rising. So called Fat-Tail Risks rise, making World Economy more vulnerable
4. Nationalism & military buildup lead to lower long term growth – boost to industrial production, but erodes trust
5. Demographics – deteriorating worldwide and leading to lower GDP growth and Deflation
   – China’s Median Age approaching critical 37.
   – China, South Korea, Taiwan & Japan aging very fast
   – As labor forces implode, growth to slow further and deflation deepen. interest in geopolitical conflicts to boost national cohesion
   – Taiwan under pressure to merge with China and S.Korea to merge with N.Korea.
6. Income inequality – Oligopolistic system replacing market economy
7. Major social transformation: Urbanization, polarization, center of Christianity shifting to the East & South
8. Resources’ constrains: energy, clean water, food, rare metals …
9. Re-emergence of the USA in global competitiveness and military
10. Rise of Sub-Saharan Africa
11. Global Trade momentum in gradual shift to Indian Ocean

Global Geopolitical Trends

1. Political polarization and less governable democracies (rise of state capitalism)
2. Military build-up by emerging nations
3. Reduced maritime & energy security – Arctic route a game changer
4. Unresolved patched-up conflicts flare up in Asia
5. Resurgent nationalism & anti-Semitism
– Religious persecution is on the rise
6. Assertive foreign policies by emerging nations unchecked
7. Rise/radicalization of Islam & Middle East destabilization
   – Emerging powers supplying conventional weapons
   – Rise of Turkey – Ottoman capture of Jerusalem 500^th anniversary
   – US shifts military resources to the Pacific & homeland
8. NATO’s encirclement of Russia
9. Rise of revolutionary socialism (populism) in Latin America
10. China achieves Nuclear 1^st strike capability
11. Superpowers converge in surveillance, tighter control & oligopolies

> Recommended next page: The Great Convergence