Tag: geopolitics
Bi-Weekly Geopolitical Report – Trump and the Political Economy of Alliances (January 27, 2025)
by Patrick Fearon-Hernandez, CFA | PDF
Now that President Trump is back in office, we think investors are about to see major changes in how the United States deals with the rest of the world. Trump, Treasury Secretary Bessent, and other key officials have signaled they will push to dramatically shift US policies on national security, foreign affairs, and international trade and capital flows. They haven’t necessarily laid out specific, detailed plans. However, based on their initial statements, it’s clear that they aim to reverse the traditional US approach to global hegemony and force US allies to shoulder more of the cost of allied security and prosperity.
In other words, Trump and his aides want to revamp the “political economy of alliance,” not only in formal military alliances such as the North Atlantic Treaty Organization (NATO), but also in the broader US-led geopolitical and economic bloc. At the same time, the China-led bloc is changing its internal relations. In this report, we show how the Trump/Bessent plan could cut costs for the US but at the risk of reducing its influence or hurting the cohesion of the US bloc. At the same time, the China bloc is moving toward greater cohesion and increased power. We wrap up with the implications for investors.
Don’t miss our accompanying podcasts, available on our website and most podcast platforms: Apple | Spotify
Confluence of Ideas – #39 “The 2025 Geopolitical Outlook” (Posted 12/16/24)
Bi-Weekly Geopolitical Podcast – #53 “Eight Megatrends Every Investor Should Know” (Posted 9/23/24)
Bi-Weekly Geopolitical Report – Eight Megatrends Every Investor Should Know (September 23, 2024)
by Patrick Fearon-Hernandez, CFA | PDF
One of the defining characteristics of our investment strategy work here at Confluence is that we pay close attention to big, global trends in geopolitics, economics and trade, demographics, technology, and even social and political developments. We then try to determine how to incorporate those trends into our strategies, either by managing the risks they impose or identifying and investing in the associated opportunities. We think this discipline can be fruitful because big, global trends are often long lasting and relatively predictable. Shorter-term, idiosyncratic forces can still make asset prices volatile from time to time, but the impact of “megatrends” often comes back to the fore relatively quickly.
Our regular readers know that we pay especially close attention to geopolitical trends. However, in this report, we want to provide a broader survey of several megatrends that are likely to remain in place for at least the next decade and be especially salient to investors. This list isn’t necessarily comprehensive; another writer could easily come up with an alternative set. All the same, we think it will be interesting for investors to consider the wide range of global trends that could affect their investments.