Brushfires are smoldering everywhere.
The US is backing multiple wars. Recession fears are rising. There’s turmoil in the bond markets. Economist A is calling for a soft landing. Economist B is calling for a market crash.
Frankly, when I sat down with Jacob Shapiro for the latest episode of Global Macro Update, I wasn’t sure we would cover anything positive.
Yet we did.
Jacob is the Director of Geopolitical Analysis at Cognitive Investments. He also co-founded Geopolitical Futures with our friend George Friedman.
In the interview, we address the military tensions running hot across the globe. The Israel-Hamas war is top of mind. But at the same time, Kosovo is pointing fingers at Serbia over a 30-person gun battle at a monastery. China’s Coast Guard rammed into a Philippine boat in contested waters in the South China Sea on Sunday. The clash led President Biden to remind China that the US military would defend the Philippines, a longstanding US ally. And of course, the war in Ukraine rages on.
It almost makes you wonder if US enemies are acting in concert to spread our military and budget thin. Congress has approved $113 billion in aid to Ukraine since February 2022. Last week, Biden proposed a new $105 billion aid package to support Ukraine and Israel, and to provide security aid for Taiwan (whose independence we don’t formally recognize) and our Indo-Pacific allies.
As Jacob says, “Usually coincidences don’t exist in geopolitics.”
Supporting all these military efforts is expensive. But I want to underscore a point Jacob and I agree on: the United States is not an empire in decline, as many argue. It’s still the most powerful country in the world, and it’s likely to remain so. However, as China and mid-sized countries like Turkey grow wealthier and militarily stronger, they are expanding their own spheres of influence, creating a multipolar world. This is one of the themes the Macro Team and I are following, and you will hear more about it in the weeks ahead.
Part of my mandate is to highlight opportunities even when the world feels heavy. In today’s interview, Jacob shares three sectors and five countries where investment opportunities are mounting. That includes the energy sector, where he sees once-in-a-century changes, along with Mexico and India.
If you caught the recent Global Macro Update on the Great Reshoring, you know I’m bullish on Mexico, too. Earlier this year, it surpassed China and Canada to become the top US trading partner. Mexico has the second-cheapest labor in the world, second only to India. This has helped it benefit from US companies who are nearshoring manufacturing—largely to reduce US dependence on China. This is another theme the Macro Team and I are tracking.
In today’s interview, you’ll hear:
Why I’ll be first in line to buy an ammonia-powered SUV
Why it’s time for the US to articulate a clearer policy on Taiwan
Why Jacob thinks Hamas is an idea in the same vein as Al-Qaeda, making it next-to-impossible to destroy
Why China and Russia have an affinity, not an alliance—and we shouldn’t worry so much about them trading in their own currencies.
You can watch my full interview with Jacob Shapiro on YouTube by clicking the image below.
A full transcript of our conversation is available here.
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