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I’m taking a break from a whirlwind five weeks that had me speak with thousands of people on multiple continents from a variety of industries. I spoke with insurance leaders in Colombia, transportation workers in Asia, investment professionals in Australia, banking and financial experts in Canada, cement executives in Panama, and food and agriculture entrepreneurs in the United States. I also met with senior government officials, think tank scholars, journalists, academics, and students. I gave keynote speeches, briefed executives and boards, and led dozens of small group conversations across a wide range of industries.
While my engagements were all organized under a generic theme of “Navigating Uncertainty,” I focused my comments on the global economy, geopolitics, and how disruptive developments in technology, energy, and demographics were likely to impact inflationary pressures plaguing the world today. And of course, I spent a fair amount of time discussing what I believe to be perhaps the most important issue facing the world today, the rapidly escalating US-China War, as well as its implications for global multilateralism, agriculture markets, and rising labor unrest.
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I found the reactions to my ideas quite interesting. In some cases, I was intentionally provocative in a quest to stir up some unconventional thinking, and while most audiences found my comments thought-provoking, not everyone was convinced by my take on what was happening in our world today. I always take the time to listen to those who disagree with me and find disagreements usually spur better thinking. Here are three of the most forceful arguments made against my analysis:
The US is destabilizing the world. America was adamant that the USSR not be present in Cuba or near the United States (remember the Monroe Doctrine?); yet America maintains bases along China’s border, and uses NATO to encircle Russia.
China is not a threat. It’s an economic house of cards that seems to collapsing; youth unemployment, ballooning debt, and slowing growth mean Beijing has seen its best days; the Chinese Communist Party must focus internally.
Inflation is here to stay. Everywhere you look, you see inflation. Food, energy, and labor markets are all supply constrained and driving higher prices. The risk of deflation is miniscule.
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I also sought to understand local perspectives on global issues. I took diligent notes after each event, scribbling down the topics that resonated and the types of questions asked. While I fully appreciate that I was definitely not talking with a cross-section of society and the people I met were disproportionately educated and wealthy, I nevertheless found the questions asked of me insightful, and three topics seemed to come up over and over again:
What’s going on with American politics? Democracy seems to be unraveling. What is driving US polarization to such extremes? What do you think will happen with the 2024 Presidential election? Will American democracy survive?
Are we going to have a recession? Won’t housing markets fall as the full impact of higher interest rates flow through the system? Won’t companies begin to lay off employees as profits fall? Will oil crash as climate change efforts ramp up?
Will the expansion of the BRICS group matter? Is this a symptom of the bifurcating global economy or the early stages of a new monetary union being formed? How will it impact the US dollar? Should we buy bitcoin to hedge?
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Given the hours and hours I’ve had on planes over the past few weeks, I’ve had plenty of time to think about what I’ve heard and observed. I’ve also paid attention to the topics that weren’t raised as much as I had expected, or issues I addressed but were met with apathy or indifference. Here are some high-level reflections that are leading me to ask more questions:
There is a strong consensus among those I met that China is going to militarily engage Taiwan in the next five years. This concerns me as surprise and deception are two hallmarks of Chinese military strategy. Could this be a diversionary tactic as Beijing plots another course? Might Japan, Korea, the Philippines, or Australia be a potential target of CCP expansionism?
I’ve been struck by how dismissive most investors have been about the restart of student loan payments. Student loan balances are larger than credit card debt, and the Wall Street Journal estimates that servicing the debt (which is scheduled to restart on October 1) will pull $100 billion out of consumer pockets. Could student debt repayment generates a recession and/or financial correction?
Concerns over the US Dollar as the global reserve currency are widespread, but when I ask audiences if they’d deploy capital into another currency, they almost universally say no. If there is no genuine alternative to the US Dollar, are worries about its future status overblown? What are the scenarios under which the world loses faith in the US Dollar?
The risks emerging from artificial intelligence (AI) seem to be getting disproportionate attention; everyone seems concerned about the downside from adopting AI. Could the opportunities being created by rapid advancements in AI be greater than any of us is expecting? Might AI generate advancements in healthcare and medicine comparable to what the Internet did for communication?
While it’s impossible to know what the future will hold, thinking about the possibilities that may transpire can help all of us navigate through the inevitable uncertainty. The almost 45,000 miles I’ve traveled in the past few weeks (equivalent to almost two trips around the planet!) have given me the thinking space to contemplate new scenarios and potential developments that can impact our world. In the weeks and months ahead, I plan to dive deeper into several of the topics raised above (as well as others that now have my attention…), so please stay tuned!
About Vikram Mansharamani
Dr. Mansharamani is a global generalist who tries to look beyond the short term view that tends to dominate today’s agenda. He spends his time speaking with leaders in business, government, academia, and journalism…and prides himself on voraciously consuming a wide variety of books, magazines, articles, TV shows, and podcasts. LinkedIn twice listed him as their #1 Top Voice for Global Economics and Worth profiled him on their list of the 100 Most Powerful People in Global Finance. He has taught at Yale and Harvard and has a PhD and two masters degrees from MIT. He is also the author of THINK FOR YOURSELF: Restoring Common Sense in an Age of Experts and Artificial Intelligence as well as BOOMBUSTOLOGY: Spotting Financial Bubbles Before They Burst. Follow him on Twitter or LinkedIn.
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