Geopolitical Concerns explores events over the last week that have highlighted the growing instability of the global order, with actions by Israel and Russia coupled with weakened multilateral institutions and shifting power dynamics.
Geoeconomics takes a look at gold’s inflation-adjusted surge and China’s push for yuan internationalization, which reflects growing global efforts to hedge against U.S. fiscal instability, policy uncertainty, and the weakening dominance of the dollar.
Global Junctions reviews the AI boom and global energy shifts, which are driving massive infrastructure investments that, while promising innovation and growth, also expose economies to geopolitical tensions and financial risks.
Global Trajectories dives into the fracturing global development consensus as geopolitical rivalries reshape energy and economic strategies, with China advancing green infrastructure and the U.S. retreating from universalist frameworks.
Geopolitical Concerns
Financial Times
The Golden Age of Multilateralism Is Over
Jo Inge Bekkevold, Foreign Policy
Israel Is Winning the War but Losing the World
David Luhnow and Joshua Chaffin, The Wall Street Journal
What is Vladimir Putin’s game plan against Nato’s eastern flank?
Henry Foy, Courtney Weaver and Charles Clover, Financial Times
The past week revealed the volatility of the international system, with Israel striking Hamas officials in Qatar and Russian drones entering Polish airspace, incidents that show the erosion of a rules-based order once anchored by U.S. leadership. Trump’s ambivalent responses have compounded perceptions of American retrenchment, emboldening actors like Netanyahu and Putin to act with fewer restraints. This sense of a “world without rules” is mirrored by the broader decline of multilateralism. While multilateral institutions continue to exist, their effectiveness in enforcing norms around security, human rights, and climate has diminished. Structural shifts from unipolarity to bipolarity, with the U.S. and China as rival poles, have weakened the incentives for global cooperation. Realist perspectives suggest that without a dominant power willing to underwrite collective goods, complex and durable multilateral frameworks give way to more fragile and transactional alignments.
Against this backdrop, Israel’s conduct of its campaign in Gaza illustrates the reputational costs of unilateral action. Once a symbol of resilience, Israel now risks pariah status even among its closest allies, as ongoing operations erode sympathy, fuel global antisemitism, and trigger diplomatic pushback such as European moves toward Palestinian recognition. Netanyahu’s government has pursued tactical security gains but at the expense of long-term legitimacy, with implications for Israel’s strategic partnerships and even American domestic politics. Meanwhile, Russia’s drone incursions into Poland, coming alongside preparations for joint exercises with Belarus, reveal Moscow’s strategy of probing NATO’s defenses and sowing divisions within the alliance. Analysts warn that these deliberate provocations test response times and highlight gaps in Europe’s air defense, showing also NATO’s urgent need for integrated capabilities as the security environment in Eastern Europe grows increasingly precarious.
Geoeconomics
Gold Surpasses Inflation-Adjusted Record High Set in 1980
Yvonne Yue Li, Yihui Xie, Jack Ryan, and Sybilla Gross, Bloomberg
China is ditching the dollar, fast
The Economist
What Alexander Hamilton Would Think of Today’s National Debt
Richard Sylla, Wall Street Journal
Record-low Indian rupee risks further weakening if US trade tiff persists
Soumyajit Saha, Nikkei Asia
Gold’s inflation-adjusted breakout above its 1980 peak reflects mounting anxiety over U.S. deficits, policy unpredictability, and questions about Federal Reserve independence, with bullion supported by central-bank diversification, renewed ETF interest, and expectations of rate cuts. The move also coincides with a gradual shift in global plumbing: China is accelerating yuan internationalization by expanding CIPS participation, deploying swap lines, nudging banks toward RMB lending, and piloting mBridge thus lifting the RMB’s role in trade invoicing and payments even as its overall shares remain modest. Together, record gold and RMB progress show a wider search for hedges and alternatives as the dollar’s dominance is tested by macro and geopolitical uncertainty.
Fiscal strain is a central backdrop. From a Hamiltonian lens, today’s $37 trillion U.S. federal debt and the lack of a credible pay-as-you-borrow framework risk higher long-term rates and a weaker dollar over time, challenging market confidence. Emerging-market currencies show how this plays out in practice. India’s rupee has hit record lows amid tariff frictions with the U.S., while the Reserve Bank of India has worked to limit volatility but also allowed a gradual depreciation. Growth resilience and large reserves temper near-term risks but do not remove them. Overall, tighter links between great-power policy, debt dynamics, and trade tensions are reshaping relative valuations with gold in demand, selective RMB uptake, and EM currencies navigating between domestic fundamentals and external shocks.
Global Junctions
What if the $3trn AI investment boom goes wrong?
The Economist
A high-risk mega-dam in Ethiopia
The Economist
China’s Green Tech Firms Pour Billions Into Overseas Factories
Sheryl Tian Tong Lee, Bloomberg
The AI investment frenzy has reached historic proportions, with U.S. tech giants on pace to spend nearly $400 billion this year alone and global data center outlays expected to top $3 trillion by 2028. The promise of artificial general intelligence has created a breakneck race for scale, but history suggests that many investors will be left with stranded assets, especially if adoption proves slower or smaller models undercut assumptions about massive compute needs. Unlike Britain’s railways or the fiber backbones of the dotcom era, much of today’s spending is tied up in fast-obsolescing chips and servers. While balance sheets remain strong enough to cushion losses, a slowdown could sap U.S. growth, given AI’s outsize contribution to GDP over the past year, and ripple into utility debt, capital markets, and household wealth. The bigger the boom swells, the harsher the chill if expectations reset.
At the same time, new energy geopolitics are playing out in ways that show both the opportunities and tensions of infrastructure megaprojects. Ethiopia’s Grand Renaissance Dam embodies national pride and potential regional integration, but it has deepened fault lines with Egypt, which views the Nile as existential, and with Sudan, where civil conflict complicates alignment. The Horn of Africa risks being pulled into wider rivalries, with whispers of Egyptian support to Ethiopian rebels and fears of conflict spilling toward the Red Sea. Parallel to this, China is exporting not just green goods but entire industrial ecosystems with more than $210 billion in overseas clean-tech investments since 2022, spanning nickel-rich Indonesia, hydrogen-ready Morocco, and solar ventures across the Middle East. These projects lower costs globally but also spark political pushback, labor disputes, and concerns about dependence on Chinese firms. Together, these junctions underscore how the AI and energy transitions, driven by capital surges and contested infrastructure, are recasting both economic trajectories and geopolitical flashpoints.
Global Trajectories
Adam Tooze, Foreign Policy
China’s Green Push May Cut Global Fossil Use by 2030, Says Ember
Bloomberg News
How Trump’s Anti-Renewables Push Is Upending US Wind and Solar
Mark Chediak and Ari Natter, Bloomberg
The development consensus is splintering. In March, Washington not only voted against UN “Days” of Hope and Peaceful Coexistence; it also issued a letter denouncing the entire SDG framework as ideologically tainted by Beijing’s slogans. That move didn’t just torch diplomatic niceties—it acknowledged a deeper reality the SDGs papered over: development is power politics by another name. China’s rise, driven by domestic mobilization and state-led investment, did not yield a thicker rules-based order; it produced a pacing strategic rival with its own template (the Global Development Initiative) and a theory of change anchored in material transformation. With Europe diverting budgets to security and the United States retreating from universalist language, the post-2015 vision of neutral, target-driven progress is giving way to transactional coalitions and hard-edged industrial strategy.
Energy is where these paths visibly diverge. China’s clean-tech surge and rapid electrification now meet incremental power demand growth at home and export cheap kit abroad, creating conditions for global fossil use to peak and enter structural decline before 2030. That’s a shock to hydrocarbon exporters and a lifeline to emerging markets that can “leapfrog” with affordable solar, wind, batteries, and grids. By contrast, U.S. policy has flipped: federal freezes and permit reversals on wind, phased-out tax credits, and new trade probes have injected uncertainty, stalled projects (notably offshore), and raised developers’ hurdle rates, just as AI-driven data centers tighten electricity supply and push bills higher. Solar and batteries remain the fastest-deployable, cost-competitive options, so blue states and large players will keep building, but at a slower clip, with more capital drifting to friendlier jurisdictions (often tied into Chinese supply chains). The energy transition is no longer a shared roadmap; it’s a contested arena where China’s scale-driven green mercantilism and America’s securitized energy pivot set diverging global trajectories for growth, prices, and geopolitical alignment.
