"The most dangerous time we've seen in decades"
Trying to make sense of things
“This may be the most dangerous time the world has seen in decades.” — Jamie Dimon
We agree.
The horrific atrocity perpetrated by Hamas on October 7th in Israel, the on-going Russia-Ukraine war and other events worry us.
Along this arc of instability from Eastern Europe to Southwest Asia, conquest and ethnic cleansing are alive and well. - Hal Brands (Bloomberg)
We worry the world is on a proverbial slippery slope, where a negative feedback loop has begun. A failure to take events and the feedback loop seriously could lead us to World War III.
We imagine several potential pathways to this WW3 extreme scenario. One pathway is through an eruption of violence between major religions (Jews + Christians vs. Muslims). This could cut across borders extremely fast with today’s global connectivity. Another is where economic- and geopolitical- “friendliness lines” harden into a “bloc vs bloc” conflict: Russia + Iran + China(?) + others vs. Israel + US + Europe + Australia + others. A third is a terrifying blend of both, a multi-front economic, kinetic and religious conflict consisting of state and non-state actors, including nuclear powers.
We’ll refer to these scenarios as the “Discordant World” or “DW” for short.
You may ask: Isn’t DW extremely low probability? Yes, well, we hope so. But conflicts and wars can easily and quickly spiral out of control. So timeline estimates are almost impossible and could range from within 6 months to within the next decade. It’s important to remember no one side is in control. In risk management, we must consider low probability cases when the impact is high. DW is very high impact.
As we shared in last week’s piece, “Warfare is not a spreadsheet, it is a conversation.” - Mike Martin. War is an on-going, back-and-forth, nonlinear process. It’s made more complicated with combatants intermingled with civilians.
In the DW scenario we imagine here, China will experience some positives, it will get some of the things Xi seem to want (end of Pax Americana?), but we're afraid there will be (obvious) ongoing enormous costs to itself and the world.