In a typically ebullient presentation at Mauldin Economics’ 2017 Strategic Investment Conference on Tuesday, author, analyst, and trend-spotter Pippa Malmgren laid out key trends set to shape the early part of the 21st century.
Overall, the future is bright enough to need shades but also sunblock, according to Malmgren. The key thing we need is situational awareness. “Nobody saw the financial crisis, Brexit, or Trump coming,” she said. “I did. Not because I’m smarter than anyone else, but because people insist on looking at the world through a mathematical lens. This is a terrible mistake.”
Here’s the world through Malmgren’s lens:
1. A Debt Solution for the Ages
How do you deal with a debt problem that’s so toweringly big that it cannot be paid down? For Malmgren, the answer could lie in blockchain technology. “Inflation won’t fix the debt problem,” Malmgren told the crowd. “What do you do? You can abandon the entire system of money and accounting.” It may sound unlikely, but given that as of Q3 2016, the world is awash with $217 trillion of debt—roughly 325% of the world’s GDP—it’s time to think the unthinkable.
2. One Belt, One Road
China is going through a reinvention by determinedly pursuing its One Belt, One Road strategy. It involves building demand for Chinese products and skills abroad—across central Asia to the Middle East and Europe and across the “Maritime Silk Road,” which runs to the Middle East, Africa, and even Latin America.
3. Uber in the White House
Malmgren’s theory on Trump is that “he’s the Uber of politics.” “His whole purpose is to displace, disintermediate, and remove the traditional centers of power,” she said. “He is doing it incredibly well.” Whatever you think of the president personally, she added, it is clear that he is attempting to shrink Washington. When Malmgren worked in the White House under Reagan, 40 people were on the National Security Council. Under Obama, this number bloated out to 400. “So, unfilled seats under Trump are not a problem,” she added.
4. Mexico is the New China
If you’re an investor searching for growth in a world of over-valued stocks and geopolitical uncertainty, there is one region you should be zeroing in on, Malmgren said. “Texas, Mexico, and the Midwest corridor—that area is the most dynamic part of the world.”
5. Look for the Arc of Steel
More ink has been spilled over Russia’s intentions now than at any time since the Cold War. Their intentions are clear, however, Malmgren said. They have just completed a military base in the Arctic—the Arctic Shamrock, one of about 100 that they are establishing in the Arctic in a land grab of resources. It’s part of their Arc of Steel, a line of construction from the Arctic to the Mediterranean and stretching into North Africa.
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