A new macro world

With Russia and China ever closer bedfellows, we have entered a new world of the West and the Rest. The comfortable status quo of old, that we have become so used to, has disappeared. This is potentially far worse than the Cold War.

And while there have been cracks for several years, with the West condemning China, Russia, Middle Eastern countries, North Korea and other totalitarian regimes for various offences, this has only become far more clear cut since Russia’s invasion of Ukraine. China has certainly made it clear that they have no intention of bowing to US pressure.

According to Pew Research, approximately half of global countries are democratic and those that aren’t represent some of the world’s biggest populations and fast-growing economies.  Democracy is not necessarily the panacea for all nations and certainly not welcome in oligopolies.

The brutal fact is that kleptocratic regimes are now clubbing together in their own axis and no longer want to kowtow or even listen to the West’s preaching. They have always had a very different agenda from that of Western democracies, but now have the economic strength to forge a different path.

Yes, democracy to us makes sense, but try telling that to Putin, Jinping, bin Salman... Unless Russia can be beaten, we are being sent on a path to a new world order, one where our old comfortable thinking no longer prevails. This is becoming ever more the West versus the Rest, it appears to be the new reality.

From an investor’s perspective, I am not convinced traditional thinking works quite so well.  We are firmly in macro market territory, where you need to be more nimble/ flexible and be prepared to go with the macro flows.