Global Bipolarity

Posted By Darren Winters on May 6, 2024

Global Bipolarity

Could the current state of global bipolarity with two poles of extremes be the root cause of heightened geopolitical tensions of the post-WW2 unilateral world order? 

Bipolar mind is a mental health condition causing extreme mood swings, emotional highs, manias and low depression.  

Global bipolarity explains geopolitics gone mad

Military officials openly discussed how they proposed to blow up the Crimean Bridge, a strategic infrastructure for civil and military purposes and symbolic, is hysteria and a mania at best.

The idea of Ukraine falling into a Russian orbit, particularly the Donbass region, which is full of coal mines and valuable minerals, is triggering a unilateral world order hysteria.

But trying to remain sane in a state of global bipolarity is a kind of madness

Global Bipolarity

So Russia’s Director of Information and Press Maria Zakharova recently asked a rhetorical question.

How would NATO feel if Russian military offices discussed openly about blowing up the Channel Tunnel?

After the Nord Stream pipeline explosion, I did fear tit-for-tat attacks on civilian infrastructure. Since the Russian invasion of Ukraine in February 2022, GPS interference has been recurring in Estonia, Latvia and Lithuania.

Global bipolarity creates emerging risks for investors

The next phase of the Ukrainian war could be a more aggressive hybrid warfare, with cyber attacks on strategic symbolic infrastructures committed by both sides. 

What if the next phase of global bipolarity madness is a wave of state-sponsored terrorism?

Global bipolarity is fertile waters for Black Swan events

Terrorizing the population in a high-profile terrorist attack would weigh heavily on the travel, tourism, and entertainment sector, which is already struggling as household budgets are tight in a cost-of-living crisis.      

Global bipolarity and the apocalypse hysteria?

Russia is “prepared” for nuclear war, warned Putin’s Russian. “We are a nuclear power, and we are ready,” warned France’s Macron. 

If Europe had a Defcon-level warning system, it would be on hair-trigger alert. 

Nuclear posturing with both sides entangled in a hot war is insane.

The Cold War Doctrine Mutually Assured Destruction with the appropriate acronym, M.A.D., comes to mind. 

France is on the western edge of Europe, and with its varied weather partners, the entire continent would become radioactive if it were attacked.    

But hardly a week passes without the nuclear doom threat flagged;

The latest, Russia Warns Attack On NATO Nuclear Sites In Poland After Warsaw’s Nod To Host Nukes.

 Global Bipolarity; the G7s versus BRICS 

WW3 is a war of two ideologically polar opposite systems;  The highly indebted G7 countries of advanced democracies versus the autocratic totalitarian systems based on commodities and production. 

Large public deficits are a feature of democratic systems, irrespective of the political leaning of the government of the day. The voting public will elect the political party to power, which will give them a better life. For the political left that means more social entitlements and welfare spending. 

The political right wants to pay fewer taxes but they want more security.

More to be spent on defence protecting the assets they own, law and order. So the public deficit of democratic systems will always keep rising irrespective of the political colour of the government elected.

“Life was not meant to be easy,” said a hopeful candidate for Australian PM. But the voting public in a democracy doesn’t want to hear the truth. Democracies elect charismatic charlatans who promise “la dolce vita” and tell them how great they are as a nation and a people.

The democratic system sometimes elects tyrants and despots. 

Hitler was elected. 

The two big players in BRICS, China and Russia, are autocratic systems. 

The leaders hold onto power through coercion and an iron fist. People fear their rulers. Going against the narrative can lead to persecution, imprisonment and even death. China and Iran are two countries which execute most of their people. 

BRICS, rich in natural resources and large manufacturing, have low debts. The leaders don’t have to buy votes. People accept that their life is not easy. 

Contrast that with a democracy where a political leader makes promises, buys votes, and the national debt rises, which gets monetised, and that ultimately leads to imbalances in the sovereign bond market.

There is a reason why the G7 are called the insolvent seven.

Global bipolarity; larger central bank balance sheet and inflation

The loss of Ukraine may not be a risk to European security, but it is a risk to US hegemony with USD as a reserve currency, which threatens the G7 debt system, a derivative of the US dollar. 

Think about it. Why would resource-rich Russia want to invade Western Europe? A more prosperous, stable and peaceful Europe means a larger market for Russian commodities. For Russia, the peace dividend is worth more than turning the continent into a radioactive battlefield.

But Europe would become an economically powerful continent outside the US-centric sphere of influence. BRICS is the largest growing economy, and everyone wants to align with a winner. Europe pivoting with Russia along the new Silk Road is a real possibility, leaving the US with its largest export, US treasuries that nobody wants to buy. 

TINA, treasuries as a safe haven asset would die. 

Imbalances in the treasury bond market would worsen, and yields would continue to rise, forcing the Fed’s hand to create even more dollars to buy surplus bonds to suppress the yields. 

Monetary inflation would worsen, and the USD would be along a path to destruction.  

Global bipolarity, WW3, unipolarity 

Whether you study the latest war developments or central bank financial policy they point to WW3.

Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion,” Fed Chair Powell.  

The Fed taper of its quantitative tapering is suppressing yields to assist the federal government’s recent 100 billion dollar war aid to Ukraine and Israel. Moreover, the US is pushing G-7 to accept a long-term $50 Billion aid package for Ukraine. The ducks are getting in line to finance a war economy, with the end game being unipolarity. But what that world will look like is anyone’s guess.   

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