This website facilitates research exchange and academic discussion across professions, and serves as a source of independent analysis in times of geopolitical and macroeconomic shifts. We are living in times of unprecedented uncertainty and news over-flow. Independent forward-looking analysis has become rather rare. This partly, because fear and incentives push analysts towards the consensus.
The post-Cold War World Economy is becoming increasingly shaped by geopolitical forces and trends, so much that – according to Christian Takushi – it is worthwhile to develop concepts, analyses and tools to research this increasingly Geopolitics-driven globalised Economy. Welcome to Geopolitical Economics. Through the dramatic rise of Asian Economies the Global Balance in economic power, politics, military, energy and religion is being affected. Not only has the center of global trade shifted to the Pacific Rim, even the center of christianity has shifted from the West to Asia, Africa and Latin America. Most realms of society are being challenged. Asia leads Emerging Markets as it challenges the supremacy of the West. Having covered the Far East and Emerging Economies for over 25 years, Christian uses his knowledge of Oriental/Latin economies and cultures to analyze how Emerging Nations are affecting global geopolitical and macroeconomic trends (and vice versa), accelerating the overlap of macroeconomic and geopolitical forces.
More accurate Economic Outlooks ..
Christian uses the “intelligence” from specialists in other fields to identify geopolitical factors that could impact the macroeconomic outlook of key economies. The Pacific Rim (USA, Mexico, China, Japan, S.Korea, Russia etc) is increasingly driving the global economic and geopolitical competition. In its broader sense “Geopolitics” encompasses all factors related to the geography & resources of nation states. From river-grids, impassable mountains, minerals, gas, oil .. to .. labor force, population, their religion and political system. Post-modern Macroeconomic Research has to incorporate changes and trends in the broader geopolitical landscape in order to make more accurate analyses and predictions.
.. with diversity and balance
Although the world economy is increasingly interconnected, financial experts, economists, political analysts and other scientists are not working closer together. Far from it. As a result, few forecasts take into account all main forces shaping today’s trends. Predictions are made often out of one single perspective. To explain motives often conspiracy theories are utilised.
For this reason Christian has been building for over 20 years a heterogenous informal network of specialists – developing a Synthesis of Geopolitical and Macroeconomic analysis. In Christian’s research all nations and their leaders are met with respect. Christian endeavours to understand the values and priorities that drive the decision-making of leaders. And they differ from culture to culture, religion to religion, and region to region. Even neighbouring states differ in their Foreign or Monetary Policy depending on their geo-strategic strength (or lack thereof.
Some recent real-life examples of how Geopolitical Macro Insight was a key advantage
- Decision-makers that followed Christian Takushi’s geopolitical analysis knew that the Swiss Franc was to appreciate sharply in 2011 and 2015 – they were in position to avoid major loses in 2011 and 2015. Christian has criticised for over 10 years the consensus and popular strategy to “underweight the Swiss Franc and Swiss Government Bonds”. Unfortunately for pensions and investors, most economists for years shared the consensus view that the Swiss Franc is very overvalued, and that it has to weaken. A costly error, born in economic research that doesn’t take into account the changing geopolitical realities. During the Cold War of 1950-2000 a narrow economic–financial research made sense, because geopolitics was relatively stable. Christian warns that this consensus, though terribly crowded and obsolete, is still deeply ingrained in financial advisers. They value the Swiss Franc based on conventional economic and financial data (i.e. inflation, interest rates ..), yet in a globalised post-Cold War economy with shifting geopolitical forces, the Swiss Franc has become increasingly driven by non-financial and non-economic forces. Reason why Christian Takushi is saying for over a decade “the Swiss Franc is economically & geopolitically still undervalued and could rise further”.
- In 2011 while most observers celebrated the Arab Spring as springboards of democracy, Christian Takushi strongly disagreed. He noticed the White House shifting priorities towards Turkey & iran, and their cooperation advancing across MENA. He warned the Arab Spring would lead to more instability, Islamic radicalisation, and a US push for energy independence.
- In 2013 as most investors were bracing for an US attack on Syria after it had crossed Obama’s Red Line, Christian Takushi warned quickly the USA will not attack Syria. Japan, the strategic US-ally to contain China was at its most vulnerable since WW2. All nuclear reactors were shut down, Japan totally dependent on Oil/Gas imports. Lacking geopolitical intelligence, many were carried away by media and missed a great “tactical investment opportunity”.
- In April 2014 Broad Money Supply Growth of large Emerging Economies (China, Brazil, India, S.Africa, Russia, Turkey, Argentina etc) came to a standstill of +0.4% YoY, after growing by 15-25% for years. The Z-Score of Takushi’s proprietary Liquidity Aggregate showed this deceleration months earlier, pointing to liquidity crises and geopolitical tensions. Since most of these large Emerging Economies were also at the bottom of Christian’s Macroeconomic Efficiency Ratio table, he predicted Argentina, Turkey, Russia, Brazil would see deepening crises or deflect into aggressive foreign policies against neighbors.
- After the MH17 tragedy in July 2014 as consensus expected a dramatic US-Russia escalation, Christian Takushi quickly told investors why the USA and Russia would not escalate beyond standard protocol. A buy opportunity.
- While many observers were concerned the Hong Kong pro-democracy protests could spread, we saw a buy opportunity. China’s median age is 37, and Hong Kong’s is even 43. Both are too “old” to embrace revolution (22 or younger needed). Understanding demographic, religious and cultural trends in Asia is vital: Confusian people rarely rebel against authority, they are more likely to endure bitter infighting between factions.
A holistic view
Geopolitical research is currently dominated by analysts and scholars with a political or government background. By contrast, Christian Takushi explains most trends & conflicts as the logical result of converging or diverging economic and geopolitical interests, rather than as clash of good and evil nations. Christian has not only broadened Macroeconomic Research to include geopolitical factors, he has also broadened the logical-linear Western view of the world to include the rather circular Oriental way of seeing the world.
Macro Economists need to listen to other professionals and scientists to better understand the changing landscape. We need to be open to ideas that may not fit into our traditional models and empirical experience. To achieve that we need get out of our comfort zone; i.e. we need to stop limiting our analysis to quantitative data & econometric models. Sadly, most economists still reject all evidence that is not formatted in regular time series. The world has become far more complex than that. The good news is that many economists are responding with an open mind to a broader approach to Macro Research, just as many political & geopolitical analysts are also showing interest in a less ideological geopolitical-political analysis.
History to repeat itself
Before WW2 most analysts vastly underestimated the inevitable and downplayed all initial signs of trouble. The scenario was too horrifying for a war-weary world to even consider it. Because of that, a tolerant world did not arrest the beginnings, Germany-Italy-Japan were challenged way too late. Today is not different, most analysis is short-sighted and influenced by public opinion and a politically-correct consensus. News have become a mass product that are marketed and sold. On the other extreme doom-sayers take advantage of widespread anxiety and fear. Both extremes are dangerous.
Disclaimer: a “must read” for non-professional investors
For transparency Christian discloses the underlying motives and worldview that could influence his analysis. Every method, model and analysis has its shortcomings. Please, read the priorities Christian sets in his research. No analysis should be interpreted as a direct investment recommendation. Any investment advise Christian gives, is strictly reserved for professional or qualified investors. Experienced investors (among his clients) receive his Global Geopolitical Macro Updates (GGMU) with investment conclusions within hours after a shock or event. And to avoid any misuse, Christian delays the publication of such reports on this website. Only part of his research is shown here. This is solely to protect less experienced, retail and hobby investors. Many investors focus on profit opportunities and miss to (1) double check their risk capability – can I afford this risk?, (2) ponder other perspectives and (3) to objectively review the risks and long term implications of the investment.
Investors need to know that one and the same analysis or investment conclusion can lead to different actions. This depends on the investors’s situation, risk tolerance, risk capacity, portfolio allocation, overall asset structure, presence of derivatives, net debt, cash flow projection, life expectancy, duties and religious beliefs. Christian strongly encourages investors to seek advice and check differing views before taking any decision affecting their investments, profession, business or family.
Christian does not assume any responsibility for the opinions expressed by other specialists (strategists, economists, analysts etc) that contribute to this website. Although they are part of our network, they are independent in their views and research – and we aim at respecting that. Their independence is important, it allows us to benefit from their analysis and to learn from one another. We don’t want a mono-culture, neither do we want only contributors that agree with Christian’s opinion.
Concrete investment implications can only be made with complete knowledge of a person’s exact situation and exposures, and that followed up continually. Conditions can change within days or even hours, therefore we’d suggest to avoid acting solely on advise from someone that cannot monitor both the world economy and your portfolio continually.
For more information about the analysis method: click here.