Speaking to more than 700 attendees at IMCA’s annual consultants conference in New York on Monday, Ian Bremmer provided a good news/bad news perspective as he assessed the political atmosphere around the world, with a couple of investment suggestions thrown in for good measure.
The founder and president of the Eurasia Group — and prolific writer on geopolitical and economic trends — started with the big picture, saying that for the first time since the end of World War II, we are now in a position where “globalization and Americanization are not the same thing.” The U.S.-European relationship is at its weakest point since the end of WWII, Bremmer said, and filling the void is China. Even the U.K. is forming a new “special relationship” with the Chinese, he said.
Bremmer foresees a “profound unwinding of the geopolitical order,” which will “hurt Europe and destroy the Middle East. As a result, the U.S. will need to “start thinking about” finding, and engaging with, “the cleanest dirty shirts” in the geopolitical sphere. Beset by the refugee crisis and flat growth, he suggested shorting Europe.
“Brexit wont happen,” Bremmer predicted, referring to the possibility of the U.K. leaving the E.U., though “it will scare people,” presenting a “buying opportunity.” However, with Greece’s resources strained by refugees from Syria and other countries in the Middle East, “the chances of a Grexit are higher now.”
Focusing on the Middle East, Bremmer said that Saudi Arabia was “increasingly isolated,” and said he worries that with discontented young men in the kingdom, “what’s holding Saudi Arabia together?” The Israeli-Palestinian issue is far down on the priority list of nations in the area and in Europe, partly because Israel no longer has to rely on Palestinian labor, and also because Israel’s Iron Dome missile protection system is “incredibly effective.”
While it might be “hard for us to hear,” he said “America is now a marginal player in the Middle East.”