Reflections on Geopolitics and Economy for the year ahead*
“NATO Allies […] have the capability, the strength to address different challenges at the same time.”
(11/10/2023, Jens Stoltenberg, NATO Secretary General)
The words of the NATO Secretary leave no room for interpretation: the transition to a multipolar world that we outlined in the last report is taking shape at different levels: on earth, in space and in the virtual.
On the terrestrial level, the First World War is expected to be ‘glocal‘, that is, local and global at the same time.
Local because it is limited to specific areas: Ukraine, Palestine, Taiwan, mainland Africa with Congo, Sudan and horn of Africa and South America with Venezuela.
Global because it is financed and armed by the two main blocs, NATO and BRICS and for this reason reported on a daily basis by the media around the world.
Thus it happens from the data in our possession, a process of “normalization” of traditional war practices to “setts the accounts”, locally in hat-areas whose politicians (and parts of the populations) were looking forward to go to war and globally at the level of tensions for control of the world between NATO and BRICS, that this year have also welcomed Saudi Arabia and are expanding.
This goes in parallel with the phenomenon called de-dollarization, which sees more and more countries wanting to detach themselves from the dollar as a bargaining chip and turn to other currency, in particular Yuan. It should be noted in this sense that the war is first and foremost economic and is between the two superpowers USA and CHINA, the first at the end of its empire, the second in the midst of the consolidation of its hegemony over the east of the world. The US and its allies remain superior today in both economic and military terms, but the trend clearly suggests a transition to multipolarism and the end of American and Western cultural, economic and military hegemony, consideri also the numbers at the population level on which the African, Arab and Eastern bloc can count.
This results in a lowering of the probabilities of a global and direct nuclear conflict between NATO and the BRICS and a slight increase in the probabilities (low to moderate) of the use of technical nuclear devices in areas such as the Middle East and Ukraine. In this scenario, the safest area of the European continent would be, as on the occasion of Chernobyl, the western part of Spain and in particular Portugal (in addition to, under certain particular conditions, the Icelandic island). It should be noted that the moderate risk is technical, that is, the chances of such an event remain very low.
The conflict between blocks then extends to space where NATO and BRICS are already working on the respective (and exclusive in their plans) occupation of areas of the solar system adjacent to the earth such as the Moon and Mars. In this sense, it should be noted that a third subject is currently at work in this regard, the market, with Jeff Bezos and Elon Musk committed respectively to being the first to ‘economically’ conquer our satellite and the red planet.
The space exploration sector will become increasingly important both in geopolitics and in the economy starting in the coming years.
And as anticipated, the virtual front is also a hot front.
Already at the beginning of September 2017 Elon Musk responded to Putin’s phrase ‘Who develops the best [AI], governs the world‘ with the words: ‘[AI] Could cause World War III’
The Copenhagen Institute for Future Studies wrote this year about the physical division of the Internet, that is, the concrete possibility that the internet, as we know it today, that is, spread all over the world, could (is already happening) turn into a group of separate networks, with the Western network open and other local closed networks such as Russian, Chinese, North-Korean, Arab and so on. Alongside this, the competition for the creation of a generalist artificial intelligence and the humanoid robot is rising more and more and, in addition to seeing various blocks opposed, as for space, sees the birth of the blockade of entrepreneurship that is until now ahead of everyone.
This third pole that sees digital entrepreneurs rise more and more in terms of economic, media and (consequently natural) political power, gives a glimpse of a future characterized by a form of Plutocracy that sees very few extremely wealthy individuals rule a world full of poor people condemned to political and economic irrelevance, similar to what is prophesied, albeit in a fictionalized key, in the film Elysium by the Canadian naturalized South African director Neill Blomkamp.
Elections in America
Although there is a fairly extensive feeling of Democrats winning over Republicans, the assumption that Trump will run again and that the belly of the red side of the US will send him back to power is far from remote.
Elections in Europe
Almost certain the victory of the Socialists-Ppe coalition and the marginalization of the right after the flop of Vox in Spain and the sovereignists of Morawiecki in Poland. Orban is increasingly alone and close to Putin while Meloni trudges in Italy besieged by its own allies and Europe as well as more and more migrants to manage (increasing for wars and climate change) in contrast to electoral promises. Von der Leyen could go towards a second term, although she is not well regarded by many officials because of her subterence to the US and her lack of propensity towards respect for the democratic process.
Elections in Russia
Putin again seems the only possible candidate in Russia, as Xi Jinping is preparing to become a quasi-emperor of his country.
As with the old media, even in new media they have arrived, thanks to Covid that forced billions of people in the house in front of the screen, to break-even-point in terms of frequency of ‘advertising’. To date, the cost of an annual marketing campaign on social media has gone from 10/15 thousand euros to 100/150 thousand euros, and the possibility of achieving organic results has greatly weakened (if not zero) and is now only the prerogative of platforms such as TikTok and Instagram in the video-short section, whose algorithm has very limiting rules regarding the form and content that is disseminated.
It is advisable to focus on other emerging media, such as the metaverse and specifically Roblox (the socio-video-game platform with the most users in the world), which sees according to the data provided by the company, in the first quarter of 2023, 66 million daily active users (10 million in 2018, 42 million in 2021 and about 60 million at the end of 2022) of which 46% under the age of 13 and 80% under the age of 16.
The economy is consolidating as a war economy, volatile and with low and slow growth, with driving sectors partly different from those of the last decade. The rate hike by central banks will presumably continue throughout 2024 or so and the announced recession will be, if ever, more “short but intense” in the US in the face of a “slow fainting and slow recovery” than the European one.
The protagonists of the market would seem to be commodities, with gold and rare metals in the lead, short bonds (1/3 years), bitcoin (with the halving of 2024 and the almost certain approval of the BlackRock ETF) and the Equity of emerging countries. The luxury watch market is stabilized by bringing brands such as Rolex, Audemars Piguet, Patek Philippe, Vacheron Constantin but also Omega, Cartier and Jaeger-Le-Coultre to position themselves high in the market for investments in movable physical goods.
*This text is to be considered a free reflection for study and research purposes. Any consideration or prediction is considered valid only until the time of publication of this text and no later and may also change completely at any time thereafter. The conclusions contained therein are in no way to be considered investment advice or financial advice. The author is in no way responsible for the actions the reader will take as a result of reading in any field.