Post Unipolar World

The world order system is changing, as the post unipolar world with one hegemonic power dominating, making global trade rules, influencing geopolitics, and dominating through its military muscle is now being shared with another great power.

A post-unipolar world could be defined as a bipolar world era where a system of world order is negotiated by rival great powers, the alphas and their subordinates, colonies

But systems are circular. So the world order system shifts from unipolar to bipolar, characterized by uncertainty as the old world order is challenged by a rising power. Great powers, like territorial alpha dogs, mark territory with their urine. The nostalgic imperial great power Russia is reclaiming its former republics, with Ukraine being the latest.

Great powers are like territorial alpha dogs. When the previously unchallenged alpha dog sniffs the urine of another alpha male on its territory, it urinates over the identical spot, which signals to challenge rival alpha dogs that this is not their territory.

Post Unipolar World

The US supplying advanced missile systems and fighter jets to Ukraine, bolstering security on the Polish border, is similar to a territorial alpha dog, remarking its territory. 

So the post-unipolar word order system is characterized by bipolarity as the great powers negotiate for territory. It is a period of great uncertainty and threat to peace. 

When alpha dogs can’t outscent each other, negotiations for territory escalate to aggressive posturing. The warning signs of a dog fight are a stiff and straight tail, a slightly upturned nose, an intense stare, then the curled lips and visible teeth with intimidating growls. At this point, a dog fight is imminent unless one alpha submits. 

The publicized new Satan II nuclear missile, which can reach the UK in three minutes, is akin to a territorial alpha dog with an intense stare and curled lips showing intimidating teeth. 

So the great powers are in the aggressive posturing phase, where the outcome is either submission or a fight, a world war. The only thing that differentiates the naked ape from other animals is its large brain, and when employed for destructive reasons, makes him the most dangerous upright walking mammal on earth. 

Animals will restore to fighting as a last resort because it is a high-risk high energy activity.

So they will try and win without fighting. The aggressive posturing of a dog, a gorilla beating on its chest to intimidate other alpha males, and great powers moving nuclear warheads on the show are all examples of an attempt to win without fighting. The risk is threats are misinterpreted, and a fight breaks out. 

As Darren Winters points out, this post-unipolar world, a bipolar world, is a high-risk period for investors because the likelihood of war between great powers is real.

How are capital flows impacted in a post-unipolar world?

A unipolar world with the US as the top dog means US hegemony sits on the world’s reserve currency throne unchallenged. 

Hegemony means a military power policing all strategic global shipping sea routes and ports which also provides hegemonic power with leverage over global trade. 

So hegemonic power makes international trading laws that benefit and reinforce its great power. Demand for the currency booms, since most of the world’s commodities are priced in US dollars.

For this reason, the USD has remained the most stable currency for international trade and holding reserve funds in a unipolar world.

Put simply, in a unipolar world, there is no alternative to the USD as the world’s reserve currency.

So there is global demand for US dollars and treasuries, making such assets safe haven assets in a unipolar world with US hegemony. 

Post unipolar world implies an alternative to the US dollar outside the US-centric world system

Russia and the BRICS countries, including Brazil, Russia, India, China, and South Africa, are officially working on their own “new global reserve currency,” RT reported in late June. And it is no surprise that the western mainstream failed to mention it.

The FT keeps banging home how US treasuries are safe-haven assets.

“The issue of creating an international reserve currency based on a basket of currencies of our countries is being worked out,” Vladimir Putin said at the BRICS business forum last month. 

Russia has been cut off from the SWIFT system, so it is also pairing with China and the BRIC nations to develop “reliable alternative mechanisms for international payments” to “cut reliance on the Western financial system.” 

In a post unipolar world, Russia is also taking other steps to strengthen the alliance between BRIC nations, including re-routing trade to China and India

We are actively engaged in reorienting our trade flows and foreign economic contacts towards reliable international partners, primarily the BRICS countries,” Putin said in his opening video address to the participants of the virtual.

Darren Winters explains that trade between Russia and the BRICS countries increased by 38% and reached $45 billion in the first three months of the year” this year, the report says. Meanwhile, Russian crude sales to China have hit record numbers during Spring of this year, edging out Saudi Arabia as China’s primary oil supplier.

“Together with BRICS partners, we are developing reliable alternative mechanisms for international settlements,” Putin said.

A post-unipolar system of world order means the waning power of US hegemony and the status of US dollars as the world’s reserve currency

If demand for USD diminishes, the exchange value of the world’s reserve currency will also fall.

The Russian ruble is the world’s top-performing currency. 

So a post-unipolar system is likely to impact Fed monetary policy because there is no alternative TINA no longer exists. If the Fed continues tightening to create the Greatest Depression, capital flights to the East will accelerate. The world order system is cyclical, constantly moving from the instability of bipolar to unipolar. Great powers play to win.

Leave a Reply

Your email address will not be published. Required fields are marked *