Weekly Geopolitical Report – American Foreign Policy: A Review, Part I (October 3, 2016)

by Bill O’Grady

In watching the political debates in the U.S. this election season, there appears to be a general misunderstanding of American foreign policy.  Although we have touched on this issue before, with the elections only about a month away, it seemed like a good time to review U.S. foreign policy since WWII.

This week, we will identify the four geopolitical imperatives of American policy, with an elaboration on each one.  We will note why each is important and why they were not fully articulated to the American public.  Most Americans have at least a vague understanding of the first imperative discussed below.  However, since the collapse of the Soviet Union, there has been a “drift” in policy that is due, in our opinion, to a lack of understanding about these imperatives.  This drift has now reached a critical point as the U.S. appears to be backing away from its postwar trade policies and the geopolitical imperatives that avoided WWIII.

In Part II, we will examine the importance of these imperatives, the rise of the populist backlash against the results of the policies that followed from meeting the imperatives, a summation of the issues and the role of the elections.  Next week, we will conclude with the impact on financial and commodity markets.

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