It is time to take a few steps beyond the paradigm of the revolt against globalization with which attempts have been made in recent years to combine and explain Brexit, Trump, Visegrád, northern European and Mediterranean populism and their ideological union with Russian nationalism , Turkish, Mexican, Indian, Filipino and soon Brazilian. This front is now so broad that it has become more practical to list those who are not part of iti.e. Canada, German or pro-German Western Europe, Japan, Australia and China. However, China is globalist only insofar as it is mercantilist. For the rest, the million Uyghurs in the concentration camps of Xinjiang and the political commissar of the communist party established in every private enterprise in recent months do not make China a champion of liberalism.
By explaining growing portions of the world (almost everything by now) this paradigm begins to leave the time it finds, it does not add knowledge and it no longer explains many of the innovations that are being produced on the global scene. So let's try to put forward some hypotheses on a new paradigm tailored to this new age of nationalisms which by now even involve Germany which is seriously thinking of acquiring atomic bombs and Japan which wants to rearm. Well, in the age of nationalisms 1) there are no longer (or there are less and less) markets superordinate to politics and 2) the return of politics as an absolutely dominant factor can only produce the primacy of the strongest political power, that of the United States.
If so, the paradigms of the past years on the world adrift in chaos (Bremmer's G-Zero) and the now ancient one of the unification of the world under the banner of liberal democracy (Fukuyama and the end of post-1989 and, in the XNUMXs, the neoconservative model of the military export of democracy). And the ideas, prevalent until a few months ago, of a imminent overtaking of China against America and that glimpsed in Davos of a bond between Europe and China in order to contain the American sovereign degeneration.
What remains standing is therefore the constant of the last hundred years, that is an America that periodically sees the growth of an aggressive and ambitious subject (Germany in 1914 and 1939, the Soviet Union in the Cold War, Japan in the XNUMXs, China today), remains initially passive, realizes the danger (sometimes exaggerating it), pulls itself together and strikes a blow deadly that restores its supremacy (the military intervention in the two world wars, the rearmament of Reagan which wears out the USSR, the revaluation of the yen under the threat of tariffs and the tariffs, again, with today's China).
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Trump is imperial, but not imperialist. He wants the complete restoration of American primacy, but he is not interested in areas of influence positively but negatively in preventing others from raising their heads. Trump has no allies but friends (Israel, Saudi Arabia, Poland, Japan, India). The historic allies who don't love him and can't wait for him to go (Germany and Canada in primis) they are downgraded to de facto adversaries and do not enjoy privileges. The supranational institutions set up by the United States after the war and then become hostile (UN, WTO) are emptied of meaning.
Trump does not use military weapons but intends to maintain US military primacy at the cost of budget deficits close to 6 percent. Above all, it uses economic warfare, duties on one side and the dollar on the other. We know about the duties, but it still needs to be clarified whether their objective is trade rebalancing or political rebalancing, with an energetic downsizing of Germany and China. As for the dollar, its strength coincides with its rarity. An America that offers the only risk-free offering that pays off and the only stock market that continues to rise is a formidable liquidity magnet that risks sending half of the emerging countries into a balance-of-payments crisis without creating too many competitiveness problems for all 'America as long as it parallels duties and tariffs.
The other aspect of the dollar as a weapon comes from its function as a means of payment for commercial and financial transactions. America can bring anyone to their knees by taking away their access to dollarswhether they are used to import commodities or to repay and refinance a dollar bond.
Not having to send American soldiers to die in a foreign land, Trump can fight an unlimited number of wars simultaneously with sanctions, tariffs and the dollar. Venezuela, Canada, Mexico, Germany, China, Turkey, Iran, Russia and from today perhaps also South Africa are the open fronts, to which must be added the NATO and WTO dispute. You don't look anyone in the face except, as we said, your friends.
The attacked countries could in theory ally with each other and create an alternative pole to America. Sometimes they try (Russia with China, Turkey with Qatar, Iran, Russia and China, Europe with China and Iran, Venezuela with Russia and China) but there are problems. These countries don't like each other because they have divergent strategic interests. Germany is afraid of being bought by China, Russia is afraid of being subordinated to China, Iran is cumbersome to Russia, Russia is treacherous to Iran, Turkey and Russia have very different interests in Syria. Secondly of these countries the only one that has the money is China and its desire to give it around decreases every day.
Third, in a perfect prisoner's dilemma pattern, each of these countries cultivates in the back of their minds the idea of a separate deal with America as a way out of all their problems. Those who undertake to make themselves harmless, as Japan did by doubling the value of the yen in the XNUMXs, he will be left alive and, if he needs money, the IMF will arrive with a suitcase full of banknotes. The idea of defection in extremis takes away the impetus of the idea of an alternative pole or reserve currency and induces everyone, including even Venezuela, not to break definitively with America and to leave the door open to dialogue.
We've talked about Trump so far, but his model may outlast him in the coming years. It is evident that Trump, after the stormy beginnings of his presidency, has reached a compromise, if not with the Deep State, then at least with powerful sectors of what Eisenhower called the military-industrial complex. And it is in broad daylight that the Schumer-like establishment democrats fully share the goal of downsizing China for at least a few decades.
In 2016, at the time of the populism/globalism paradigm, the money from the markets instinctively ran away from populism and took refuge in globalism. Today, in the new neo-imperial paradigm, money is fleeing the provinces and taking refuge in the American metropolis. This process will occasionally undergo phases of ebb, especially if and when the continuous hikes by the Fed induce an American mini-recession and a drop in interest rates, the stock market and the dollar, but it is in any case the structural factor that could dominate until the next paradigm. For the moment, the only thing that could end it prematurely (and abruptly) would be an America which, after surprising us in 2016 with Trump, surprises us in 2020 with the first socialist White House in history, a hypothesis we tentatively give a 25 percent chance.
It is this 25 percent probability, factored into a world that has begun to move very fast, that causes us not to be 100 percent invested in the United States and to maintain an important weight in the rest of the world. However, this does not mean that the dynamic part of the portfolio cannot remain in America at least for some time yet.
