The unilateral world era, with the US as a hegemonic global power, could be in the twilight and could be in the dawn of a multipolar world.
Perhaps the US withdrawal from Afghanistan after two decades is a symbolic event underscoring the US’s unwillingness to take on the role as global enforcers with all the costs it entails.
“The unilateral world era, with the US as a hegemonic global power, could be in the twilight and could be in the dawn of a multipolar world”
“American troops cannot and should not be fighting in a war and dying in a war that Afghan forces are not willing to fight for themselves” said US president Biden.
In other words, the US is no longer willing to spend blood and treasure fighting foreign wars unless it impacts national interests.
Following the dissolution of the Soviet Union in 1991 the US was the world’s sole hegemonic power. But many are arguing that US hegemony and the US dollar as the world’s reserve currency have been on the decline.
The US dollar index, DXY peaked at 103. There was a double top in January of 2017, and currently, in the wake of the pandemic, it’s about 10% lower. The dollar has been in a series of declining highs for decades and Bond King Jeffrey Gundlach thinks that the world’s reserve currency, The USD is going to take out the lows of the past down cycle.
“American troops cannot and should not be fighting in a war and dying in a war that Afghan forces are not willing to fight for themselves”
US President Biden
So could the winding down of military operations in Afghanistan and The Fed’s endless monetary easing policy, which is debasing the currency be by design, a deliberate signal to the world’s that the only superpower has grown weary leading a unilateral world and is prepared to share power with China in a multipolar world.
China is now expected to be the world’s largest economy, in less than a decade if the current economic trajectory continues
Already big brand names are preparing for a bipolar, or unilateral world where hegemonic power is shared between the superpowers, the US and China.
Chief executive John Donahoe said, “Nike is a brand that is of China and for China.”
China is the largest automobile market worldwide, both in terms of demand and supply. Moreover, mainland China is on track to become the world’s largest personal luxury market by 2025. China also has the largest number of savers in the world, with a gross savings rate of 40.7%.
“We could be witnessing the end of US hegemony and the beginning of a multipolar world where power is shared with the global superpowers” – Win Investing
Could US foreign policy change from seeing China as a competitive rival to the strategic alliance in a new multipolar world?
We could be witnessing the end of US hegemony and the beginning of a multipolar world where power is shared with the global superpowers?
If so, the implications for investors are significant, the end of the US privilege of being the world’s only reserve currency will be over or shared.
Investment opportunities could be outside the US dollar-centric world along the new silk road
But what if the US views China as a rival, a potential threat to its hegemonic power and policy turns hawkishly warlike?
What happens in the next few years could shape the century.
Are we on the cusp of a unilateral world or a major conflict?