Are populism, central banking, and high tech fragmenting the world? Jay Pelosky, Co-Founder of TPW Investment Management lays out his thesis of a world splintering into three divergent spheres — North America, Europe, and Asia. Pelosky also unpacks what he believes to be the critical implications for investors. Filmed on October 19, 2018 in New York.
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Searching For Opportunity In The Tri-Polar World | Expert View | Real Vision™
The tripolar world really stands for a thesis which argues that regional deepening and regional integration in the three main regions of Europe, Asia, and the Americas can drive the global economy forward. And it's an outgrowth of my frustration really, for the policy mix that was developed over the course of the years following the great financial crisis, when policy really was central bank driven, and monetary policy specific. Which worked out well for the financial markets, but didn't help Main Street in the real economy particularly very much. And so as a result-- one of the results is that we've seen this rise of populism, both in the developed and the emerging economies, which we now have to deal with.
So as a reminder, the tripolar world regional integration is driven by three new and mutually reinforcing factors. The first is each region's growing ability to self finance. So if you think about the development for example, of the Chinese capital markets, or South American pension system, or the European corporate bond market, all those are examples of each region's growing ability to self finance.
The second driver is each region's growing ability to self produce. Think about advanced manufacturing, robotics, 3D printing. All these things are allowing production to be centered closer to the consumer. And so the third driver is exactly that-- each region's growing ability to self consume. Driven really, by the rise of urbanization, service sector economy, and of course, e- commerce.
So as we see it at TPW Investment Management, globalization as it was discussed and described in the 1990s and early 2000s is no longer viable. Certainly not at the ballot box, whether it's in the United States, or Europe. Really, anywhere in the world.
And secondly, economic nationalism really doesn't work in our global economy. So we believe that the tripolar world is a kind of interim step or a step in between the two between full globalization and economic nationalism. There's space for regional deepening and regional integration to drive the global economy forward.