Geopolitics and Markets Review – 19th December 2022

Looking Ahead to 2023 For The US.

As we approach the end of 2022, we reflect on the events of this year and look forward to the coming year.

We had a massive breakthrough in nuclear fusion this past week as a method of energy production. Nuclear fusion is what occurs in the sun that provides us with energy. If we can replicate nuclear fusion, we have an unlimited energy source.

Figure 1 - Virtual Capitalist - https://www.visualcapitalist.com/science-of-nuclear-fusion/

As this chart from virtual capitalist says, fusion involves intense heat to force atoms together. It involves isotopes of hydrogen called tritium and deuterium. An isotope is an atom that has a different number of neutrons. It must have the same number of protons (atomic number) as this is what makes an element an element.

The breakthrough this week was exothermic. This means more energy was released in the reaction than was put into it to force the atoms together. For nuclear fusion to provide energy to the world, it will need to always be exothermic. This is a massive step forward.

But, this breakthrough could still take a long time until it is available as a method of energy production for consumers. I've looked at long-term trends in the world of geopolitics. It seems clear from the previous three years in this decade that it will be one of more tension and chaos. When global systems undergo large changes, there is a grab for power. Those who have it try to maintain it, and those who want it make strategic ploys in an attempt to gain it.

Will 2023 be a year of soft power or hard power? What events could occur? And how can we position ourselves to protect ourselves in the case of these events?