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Geopolitical Threats

Athena @ ST 5 September 2017


Right now, the world economy is seemingly stable. Sentiment could shift rapidly if a clear and present geopolitical event, caused by a paucity of international leadership and diplomacy shocks the markets. This, coupled with the high-risk combination of record debt, low growth, and limited scope for action, could see the global economy spiral into a new crisis.
What is changing?

Implications

Sentiment Analysis
Global Sentiment is a coincident Indicator of emerging change. As pictured above it analyses the mood of the pundits who are reporting on the future. Since pundits generally reflect the mood of society and change society's opinions it is a good indicator of people's current view of the future.



Right now, pundits are slightly positive on world prospect’s.

Economy Watch is a lagging indicator of emerging change.  It auto-aggregates opinions of our 8,000+ sources on whether the global economy is likely to grow or decline in the future.


The global economy, as measured by Sentiment analysis, has been on a slowly advancing track over the last year but….

VUCA World tells a different story. VUCA World is a leading indicator of emerging change. It describes whether reported volatility, uncertainty, complexity and ambiguity of general global current conditions and situations is getting better or worse. Movements up or down in this graph generally presage the same effect in the other two charts in the future.

From a neutral position in January 2017 VUCA has been dropping and is now at its lowest point for almost a decade.

The combination of these three charts gives you an overall picture of where the global economy is heading. Right now, the world economy is seemingly stable but with a rapidly increasing degree of uncertainty caused by growing geopolitical issues worldwide. Sentiment could shift rapidly if a clear and present geopolitical event, caused by a paucity of international leadership and diplomacy shocks the markets. This coupled with the high-risk combination of record debt, low growth, and limited scope for action could see the global economy spiral into a new crisis. We place the probability as high as 30%: up from 25% in January 2017.

Forecast:
Insight:

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