Is it just me or have you had that deep, dark, disturbing feeling that things have gotten a wee bit out of control here in the US and globally? And that you believe you are increasingly powerless to control your fate due to the proliferation of ‘Black Swan’ type random elements? Well, Citibank, in a prescient early 2016 report; “Global Political Risk – The New Convergence Between Geopolitical and Vox Populi Risk, and Why It Matters” appears to go a long way in confirming your concerns. And that was even before BREXIT, the election of President Trump, the attempted coup in Turkey, increasing terrorist attacks, and a host of other events.
According to the Citi GPS report, “In our view, rising ‘old’ geopolitical risks (violence and conflict, military adventurism, disputes over borders & territory) with “new” socio-economic risks (Vox Populi risks; uncertain election outcomes, fringe politics, “flash mob” mass protests, declining trust in elites, income inequality concerns) has the potential to converge, creating more destabilizing by-products in the process.” Combine that with governments around the world inability or unwillingness to deal with these risks in other than an ad hoc fashion, especially since the financial crisis, does not bode well for the peaceful transition from the post Cold War relative stability to some other transformative state of global being.
Are we facing systemic political fragmentation globally? Does it really matter? In the US, Wall Street appears to have “baked in” the risk with markets getting higher; volatility low; consumer confidence growing; and unemployment trending lower. World Indexes are also trending higher on average (although some countries are going the wrong way).
Of course, not everyone benefits and therefore highlights the strains and disconnects I’m talking about.