Geopolitics and Markets Review - 12th December 2022

Does winter usually lead to the world of Geopolitics freezing over?

Tensions seem to have dropped in recent weeks. Less is being heard in the mainstream media. One way to remain up to date with current events is through Twitter (if you’re on the right side of Twitter) or listening to the right people. So is anything happening in the background? Over the long term, of course. It always is.

US-China: Ruling Power vs Rising Power

I attended a Geopolitics talk last week and sat among some very intelligent people. They say if you want to learn the most, surround yourself with people a lot more intelligent than yourself, and this is definitely true. The talk was only 90 minutes long, but it gave me many ideas for writing topics. This is one such idea.

The relationship between a ruling power and a rising power has occurred countless times in history. But how do they often unfold? Does the ruling power maintain power, or does the rising power give such a challenge that the ruling power declines?

Look at the UK after World War Two. This was a peaceful passing of the torch. The UK had high debts that financed the war, and the US emerged in a better condition to take advantage of the damaged world order. It spread its power through Bretton Woods and the creation of the IMF, among other key historical events, e.g. NATO. Control most aspects of life on Earth and having any worthy challenger emerge will be difficult, and will take a long time.

In fact, this peaceful transition was a massive break of the trend. Before the UK-US peaceful power transition, there had not been a power transition occurred without a war.

The World Was Different, Why Do We Fight Less?