Thinking in Cycles (Sep ‘22)
The world is speeding up! Let’s break it down.
I’ve always had a passing interest in geopolitics and would love to start writing down some of my thoughts. Putting things in perspective like this helps me not feel so mired down in the day-to-day doom-and-gloom, and zoom out to instead realize that world progress is not linear.
You have zero reason to listen to me, as I’ve spent my entire career in US Healthcare and thus have very little depth in this space. But you’re here! So let’s dive in.
The world operates in cycles. Those cycles can be around economic progression, how war-oriented we are, the rate of scientific progress, population sentiment, climate, and much more.
For certain periods, those macro cycles work together. For example, post WWII up until the Cold War. Or 2002 until the 2008 Financial Collapse, or ~2011 until ~2018. The ultimate marker of the world, or regions of the world “cycling together” is that people begin to feel stasis. We get used to the way things are supposed to be.
Then, there are other periods where the cycles clash, violently.
- Around 1990 we saw cycles clash: the End of the Cold War (“war” cycle), the Rise of the Internet, (scientific progress cycle), Oil Price Shocks (economic cycle).
- Around 2001 after the Dot Com Bust caused worldwide economic selloffs (economic cycle), 9/11 and the Iraq War effort peaked world tensions (geopolitical cycle).
These moments when the cycles clash are often a reset for the world. I would argue that we are in such a reset, now.
The EU is Most Representative of Cyclical Clashes
The EU Broadly is ground zero for several cycles clashing together all at once — America is shielded from some of these cycles, as we’ll see.
In the EU first, the short term War Cycle (WC) and the Energy Cycle (EnC) are coming to a head. As has been broadly discussed, Russia is certainly not winning the war, but by turning off the natural gas spigot, it has increased the probability of settlement negotiations. However, we are still ways away from that settlement, and in the meantime energy prices are soaring (along with inflation, Economic Cycle, EcC) and people can’t afford energy for this homes and businesses. That creates an even messier situation where the Political Cycle (PC) has turned against supporting Ukraine (see Prague Protests) in certain countries. [This All in Pod episode breaks this down well]
Europe: shWC x EnC x EcC x PC => ??
Where is America in these Cyclical Clashes?
We are shielded from the short term War Cycle (WC) and Energy Cycle (EnC), largely because we’re an ocean away and self-produce almost all of the natural gas that we consume as a country. We are still subject to Economic Cycle (EcC) with stock down dramatically, rising inflation and heightened economic uncertainty. Our Political Polarization Cycle (PpC) is increasing given the Roe v Wade decision, the possible Return of Trump and the Impending Mid-Terms.
While we’re shielded from the short term War Cycle, our long term War Cycle (ltWC) propensity has increased. Our proxy war against Russia (which has a “no limits” relationship with China) , Pelosi’s visit to Taiwan and economic battles have all deeply strained an already tense relationship with China. Their optimal window of opportunity for taking military action against Taiwan has been predicted to be 2024–2027.
America: ltWC x EcC x PpC x GpC => ?
It’s not just about the EU and the US — other regions are feeling this too.
If you look at Latm and India, they are following very similar cyclical clashes. India in particular is facing a Nationalism Wave coupled with a Pro-Hinduism/Anti-Muslim Wave (Population Sentiment and Political Cycles). It will soon be forced to choose sides in the US v Russia and US v China entanglements.
We don’t know all the effects of these cyclical clashes, but experts have predicted which Superpower will rise to the top once the chaos settles.
Two geopolitical experts predict a period of strife followed by an “American Century”, and one hedge fund guru predicts the opposite — that China will rise as the new Global Superpower.
In his book The Storm Before the Calm, George Friedman lays out the argument for the emergence of a new Institutional and Socio-Economic Cycle that emerges in 2030 after a period of intense conflict from 2020–2030. With China’s impending population crisis and inability for Communism to keep a populace at-bay, he predicts they will recede from the World Stage and this will be the American Century.
Friedman’s protégé, Peter Zeihan, lays out a similar argument in his book, Disunited Nations. Ultimately, China won’t be able to support its aging population given the population distribution — significant government intervention will be necessary and that will hardly be enough to placate the populace.
Hedge Fund Manager, Ray Dalio, sees the opposite happening. There are too many cyclical issues going against the US, and the centralized planning machine of China will overtake the US in the long run:
One things for sure: We’re in a period of intense global conflict and strife.
From now through at least the 2028 US presidential election, we are almost certainly in a very intense period. As detailed by the World’s Leading Scientists and Geopolitical Experts, we are closer now to man-made global catastrophe than we’ve every been.
Ultimately, we’ll need to catch a break somewhere — some examples could be:
- Conflicts occurs and we move past it once a new Order or Global Cycle is established. This has happened for thousands of years.
- We innovate our way out. Scientific breakthroughs occur that decrease food insecurity, increase energy production, reduce sickness in the world, and generally level the playing field.
- Cooler heads prevail — unlikely but possible. Throughout history, great women and men have chosen NOT to strike, and have chosen de-escalation knowing that they are the stewards of peace.
- A country unexpectedly bows out from the world stage. Natural disasters, civil wars and other factors could take Russia, China or US out of the game and decrease tensions worldwide.
From my part, I’ll be watching and learning from the sidelines to see how the world shakes out.
As always I welcome your feedback and comments. You can find me on twitter @RSiddhanti, DMs are open.
