Tag: defense spending
Bi-Weekly Geopolitical Report – Introducing Friedrich Merz, Chancellor of Germany (June 23, 2025)
by Daniel Ortwerth, CFA | PDF
The last year has witnessed an extraordinary series of events in German politics. A chancellor failed a no-confidence vote. A parliament collapsed. The subsequent parliamentary election, which typically happens on a five-year cycle, was moved forward by five months. In that election, Germany’s far-right party surged to a second-place finish, capitalizing on recent successes on the regional level. For the first time since World War II, a nominated new chancellor failed to receive the necessary majority in the first round of voting and required a second round to ascend to the position. Emerging from this political turbulence, we find the new chancellor of Germany, Friedrich Merz, whose background and policies now serve as a lens to better understand the largest country in Europe and third largest economy in the world.
This report begins with a brief biography of Chancellor Merz, focusing on his political career. It continues with a discussion of the political context of today’s Germany that gave rise to his election, and it culminates with considerations of what we should expect from his leadership. As always, we conclude with implications for investors.
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Bi-Weekly Geopolitical Podcast – #6 “The New Era of Higher Defense Budgets” (Posted 3/28/22)
Bi-Weekly Geopolitical Report – The New Era of Higher Defense Budgets (March 28, 2022)
by Patrick Fearon-Hernandez, CFA | PDF
The Russia-Ukraine war has transformed the world in the blink of an eye. We think the war and its aftermath will reverse much of the economic globalization of recent decades and cleave the world into two or more blocs with only limited interplay. We believe sanctions on Russia will discourage many central banks from seeing the U.S. dollar as their preferred reserve currency. We see an isolated Russia being forced into an even tighter relationship with China, where it will be the junior partner.
Now that it’s easier to see the geopolitical and military threats from authoritarian leaders in China, Russia, and beyond, we believe the war has also ushered in a new era of high defense spending. We expect that countries around the world will now invest much more in national defense than they have in decades. This report examines the implications of higher defense spending within NATO and the potential ramifications for investors.