Minovi: U.S. Poses Biggest Geopolitical Risk In 2020

Minovi: U.S. Poses Biggest Geopolitical Risk In 2020

The global economy has slowed down, the ability to offset the impact of negative political risk is lower, and that’s the environment in which the risks we see for 2020 and 2021 are concerning, Maziar Minovi, CEO of Eurasia Group, told Real Vision’s The Interview.

Minovi said the US is the biggest geopolitical risk in 2020, not because of the impending election, but because of the extreme polarization the election will surely intensify.

“As we approach the election and its aftermath, there will be a crisis of legitimacy in the US – something that the markets aren’t used to thinking about or pricing,” he said. “Whoever loses will have a hard time accepting the outcome. How is the market going to respond to that? How are foreign leaders going to respond to that, enemies and allies?”

Other risks Minovi is keeping an eye on include the decoupling of the US-China trade relationship, the severing of technological protocols, the impact of the IMF downgrading of India, populist movements threatening multinational corporations, Turkey, Mexico, and more.

Minovi said that investors should consider the probability of a risk happening and also the impact it would have on the global economy or markets when preparing themselves to weather geopolitical uncertainty in 2020 and beyond.

“When you widen the lens to geopolitical risks that make sustained impact on major markets, in fact, there are very few that do so,” he said.

“There are only a few situations where this happens where the impact is persistent and large. As an investor, you can either take these risks as given and react to them, or you can try to lean in. I’ve always tried to lean in.”

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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