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Bigger Than Trump – A Geopolitical Recession

While mainstream news organizations have story cycles of 48 to 72 hours, and presidential elections are conducted every 4 years with prime ministers every 6 years (this number varies by country), economic recessions in modern history are 7 to 8 years since WWII. These short-term and mid-term events dominate public thinking and the result is that many people confuse these events with Geopolitical Cycles or Geopoltical Recessions that occur every 75 to 80 years. The planet is falling into a massive recession of such that started in 1991, when the Soviet Union fell, and it is important to note that the MSM rage machine points at Trump for any and all things negative, when in fact, he like those  reading this article, has little to do with the vast majority of the challenges currently faced by the world. 

In our recent geopolitical comments we focused on the 1930s and 1940s, the last global recession, the last geopolitical recession and its aftermath that set the groundwork for the European Union, the Bretton-Woods, World Bank and many other organizations that we thought were permanent. These multilateral systems were set up between 1944 and 1948 to 1. fight communism/Soviet Union and 2. to contain Germany and avoid future wars. The world aligned itself with US and its allies` systems and views. But since the Soviet Union does not exist, following the US makes no sense. In fact, France and Germany want little to do with the United States, and the feeling is mutual. 

The relationship between the US and Europe, the most important relationship since WWII is now weaker on the global stage…..power is pivoting to Asia. The entire planet now sees the European Union, World Bank and even the United Nations as systems that must be dismantled or in the very least, upgraded for a new world order. 

The rise of China and the Emerging Markets – think about the massive power that has developed in China. More importantly, the behavior of China to Vietnam, South Korea, Japan, and India, all systems and treaties will change and in many cases have already started. 

Ian Bremmer says, “This geopolitical recession is something really simple – it is the end of the US-led world order. And we do not have a system to replace it with.” An example on a micro level would  be Germany. The US currently has 85 military installations in Germany, all built to stop the Soviet Union and the threat of communism. But communism collapsed in December 1991, and the US bases are not needed to defend Germany. However, if the US pulls them out, a vacuum develops and Germany could start spending enormous amounts on its military. The UK, France, the Dutch, the Russians and 30 other countries in Europe do not want the US to pull its bases out of Germany for fear of just such an outcome. So what to do?

And this is what it all comes down to.
No one knows yet. 

This is just one of the post-WWII challenges that the US, China and Russia face. This means that World Bank, the European Union and other institutions might not exist in 20 years. This means chaos. 

Team Classiarius 

President Trump will be the first of the next 3 presidents who must deal with this geopolitical issue. 

JMB

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Classarius is the only data driven news for blockchain, cryptocurrencies and technology from investment professionals.
Disclaimer: We do not provide investment advice or strategies, this article is not intended as such but only to provide you the reader with information. Please conduct your own research before any investment of any kind.

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