Tuesday, September 16, 2014

Geopolitical issues will affect global trade negatively

I think that geopolitical issues will become more important. At the present time what is dominating the geopolitical discussions is what is happening in the North of Iraq, in the Gaza Strip and in Syria but it will spread out to Saudi Arabia, because don't forget Saudi Arabia has a huge border with Iraq. 

Also it will spread out into Turkey and then it will obviously not be favorable for global trade. 

The other issue not frequently discussed is the increase in tensions in South East Asia. China is a huge power, it needs resources, it will have to make sure resources will always flow to China - Iron, Ore, Copper. And the US has had this pivot to Asia which they declared two years ago. Now they have a closer defence agreement with Philipines and Australia, which if you are Chinese is a hostile move.