Bi-Weekly Geopolitical Report – The Changing Face of War (April 22, 2024)

by Daniel Ortwerth, CFA | PDF

If the United States were at war with another great power, would we know it?  How would we know it?  These questions might seem absurd but consider that the US has not fought a war against a major world power since 1945.  Meanwhile, when the US has engaged in conflicts against weaker and regional powers since World War II, the beginnings and endings of the conflicts have tended to be blurred.  Technology has advanced in ways unimaginable to the 1945 mind.  This has changed the nature of life, and it has also changed the face of war.  In this report, we consider how the contours of that face have changed over time, what it takes to recognize war in the 21st century, and whether the US and its allies might already be at war with China and its allies.

By addressing key elements of technological advancement and geopolitical evolution, we explore how 80 years have changed the face of war.  We consider aspects of war that have not and never will change as well as what has changed, and we drive to the bottom line for investors.  In our view, that bottom line has remained constant through time as war is expensive, citizens pay the price, and that price largely manifests itself in the form of higher inflation and long-term interest rates.  Will the US ever go to war again with another major power in a way that we can recognize?  Will we know it when we are there?  These questions are harder to answer than ever before, but investors can still prepare.

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