by Bill O’Grady
It has been 25 years since the Berlin Wall ceased to divide East and West Berlin. After signifying the “hard border” between two competing world systems where East German security forces “shot to kill” their countrymen who tried to cross into West Berlin, suddenly, Germans were safely pouring across the dividing line. Although communism did not end as a political and economic system with this event, it signaled the end of its power. Essentially, the communism of the former Soviet Union is only practiced in North Korea and Cuba today, and the latter may be poised to jettison socialism and communism after the elderly Castro brothers pass from this earthly plane.
The fall of the Berlin Wall was a momentous event but like all such occasions, only the passage of time allows us to appreciate more fully the incident’s importance. In another 25 years, we will have an even more nuanced understanding of this event. But, a quarter century does offer us perspective we did not have in 1989.
In this report, we will examine the first of four important consequences from the fall of the Berlin Wall. These are:
- The End of Marxism
- The Collapse of the U.S.S.R.
- The Onset of the U.S. Unipolar Moment
- The Impact of German Unification
We will offer a simple conclusion this week and end next week’s report with market ramifications.