All is not quiet on the Eastern front

Bloomberg/Niall Ferguson/12-31-2022

“War is back. Could world war also make a comeback? If so, it will affect all of our lives. In the second interwar era (1991-2019), we lost sight of the role of war in the global economy.…[W]e forgot that war is history’s favorite driver of inflation, debt defaults — even famines. That is because large-scale war is simultaneously destructive of productive capacity, disruptive of trade, and destabilizing of fiscal and monetary policies.”

USAGOLD note: Ferguson examines how the current cold war could become a hot one. He starts wwith Kissinger’s current thinking, touches on the importance of algo-driven weaponry and other technological aspects of the current rivalry with Russia and China, and delves into what he calls America’s Achilles heel – the federal debt (of which China holds $970 billion) and interest payments on it. He worries that the conflict in Ukraine be the smaller war that ushers in a bigger one.