Tag: Russia

Weekly Geopolitical Report – Back to the Future? Prospects for a New Cold War Against China (October 12, 2020)

Posted on by Rebekah Stovall

by Patrick Fearon-Hernandez, CFA | PDF

This edition of our Weekly Geopolitical Report explores the prospects of a new Cold War between the United States and China.  Based on the author’s personal experiences at the end of the U.S.-Soviet Cold War, this report explores the various costs that would likely arise from a new Cold War and what those costs imply for investment strategy.

When I asked her if she had any trouble getting her ticket from St. Petersburg to Moscow to join me for the long weekend, she said, “No.”  Then, with a sly grin and a meaningful glance deep into my eyes, she added, “I just asked for help from a friend in the KGB who works for President Gorbachev.”  I suppose I grinned a bit, too, since she had just confirmed her association with Soviet intelligence, which I had suspected ever since we met in a hotel bar in St. Petersburg weeks before.  If I did let a grin slip out, it probably also reflected the irony of knowing how badly my office at the CIA was going to react to this forbidden dalliance when I got back to Washington.  But it was a beautiful, bright, crisp autumn morning in Moscow in September 1991, just after the attempted coup against Gorbachev, and I was still young.

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Weekly Geopolitical Report – The Mid-Year Geopolitical Outlook (July 10, 2017)

Posted on by Rebekah Stovall

by Bill O’Grady

As is our custom, we update our geopolitical outlook for the remainder of the year as the first half comes to a close.  This report is less a series of predictions as it is a list of potential geopolitical issues that we believe will dominate the international landscape for the rest of the year.  It is not designed to be exhaustive; instead, it focuses on the “big picture” conditions that we believe will affect policy and markets going forward.  They are listed in order of importance.

Issue #1: The Political Fragmentation of the West

Issue #2: North Korea

Issue #3: An Unsettled Middle East

Issue #4: A Resurgent Russia

Issue #5: China’s Financial Situation

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Weekly Geopolitical Report – It’s Tsar, Not Comrade (March 27, 2017)

Posted on by Rebekah Stovall

by Bill O’Grady

February 12th was the 100-year anniversary of the Russian Revolution.  Surprisingly, the Kremlin has taken a very low-key stance on the centenary.  We believe the government’s decision to downplay this historical event offers an insight into Russian President Putin’s thinking.

In this report, we will present a history of the Russian Revolution, showing how civil order deteriorated in the years after 1917.  We will offer observations of how the Kremlin’s treatment of the revolution reflects Putin’s worldview.  As always, we will conclude with potential market effects.

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Weekly Geopolitical Report – What’s Putin up to? (August 29, 2016)

Posted on by Rebekah Stovall

by Bill O’Grady

Over the past few months, Russian President Vladimir Putin has been unusually active on multiple fronts.  He has expanded his military operations in the Middle East in support of Syrian President Assad, boosted troop strength on the Ukrainian border and conducted a major purge and restructuring of the Russian government.  He has also accused Ukraine of terrorist activity in Crimea, which he seized in 2014.

In this report, we will offer a short recap of Putin’s recent activities.  To create context for these moves, we will discuss how these actions fit into Putin’s hold on power.  As always, we will conclude with potential market ramifications.

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Weekly Geopolitical Report – The Gordon Dilemma (August 12, 2013)

Posted on by Rebekah Stovall

by Bill O’Grady

Robert Gordon is a well-known economist who teaches at Northwestern University.  He was a member of the Boskin Commission that assessed the accuracy of the CPI and is also a member of the National Bureau of Economic Research, the body that dates business cycles.  Part of his research has focused on long-term economic and productivity growth.

In August 2012, he published a working paper suggesting that U.S. economic growth was “over.”[1]  Gordon’s thesis is that the first two industrial revolutions, the first starting in 1750 in England and the second in 1870 in the U.S., were so remarkable that nothing else has had a similar impact.  Although Gordon does acknowledge a third revolution, the computer and internet revolution which began around 1960, he suggests the impact pales in comparison to the earlier two revolutions.

From there, Gordon argues that the jump in growth that occurred from the first two revolutions will not likely be repeated, meaning that growth will slow down to the pre-revolutionary trend.  That isn’t to say that growth will become non-existent.  Instead, growth will slow to around 1.5% per year permanently.

The geopolitical impact of such a slowdown would be significant.  The global superpower generally is dominant in both the military and economic spheres.  It will be difficult for the U.S. to maintain such dominance with such slow growth.  Not only will fiscal restraints develop because of this slow growth, which will make military budgets problematic, fulfilling the reserve currency role and the global importer of last resort function will become nearly impossible as well.

In this report, we will discuss Professor Gordon’s thesis, examine the geopolitical impact if he is correct and offer some criticisms of his thesis.  We will conclude with potential market ramifications.

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[1] NBER Working Paper 18315, “Is U.S. Economic Growth Over?  Faltering Innovation Confronts the Six Headwinds,” Aug 2012.