Willemstad, Curaçao (PinionNewswire) — Rising geopolitical conflicts have become one of the strongest forces reshaping the global economy in 2025. What used to be isolated regional tensions now frequently spill over into global markets, influencing supply chains, inflation dynamics, risk premiums, and long-term investment decisions. Merritt Dawsley notes that the scale and speed of these economic spillovers are far greater than in previous decades.

1. Energy and Commodity Markets Face Persistent Shockwaves

Recent conflicts involving key commodity-producing regions have tightened supplies across oil, natural gas, metals, fertilizer, and agricultural products. Unlike past cycles, markets now face structural fragmentation, where supply is reshaped not only by physical disruptions but also by sanctions, shipping restrictions, and political alignment.

Energy prices show faster and sharper reactions even to small disruptions.
Insurance premiums on major sea routes have surged, adding cost to global trade.
Commodity exporters outside conflict zones—including Latin America and parts of Africa—are benefiting from higher prices but facing currency volatility.

Merritt Dawsley observes that in this new environment, even a minor escalation can push markets toward a risk-off stance, reinforcing price spikes and tightening global liquidity.

2. Trade Fragmentation Is Slowing Global Growth

Trade has become a central channel through which geopolitical tensions hit GDP.

Major economies are increasingly redesigning supply chains around security, not efficiency:

Companies diversify manufacturing away from single-country dependence.
Governments impose tariffs or strategic export controls.
Shipping costs remain elevated following repeated rerouting around conflict zones.

This results in a slower, more expensive global trade system, with lower productivity gains and reduced competitive pressure. Merritt Dawsley points out that such fragmentation is now priced into long-term growth forecasts, reducing trend growth across both advanced and emerging markets.

3: Inflation Becomes More Volatile Under Geopolitical Stress

Geopolitical shocks tend to be inflationary—especially when they disrupt food or energy.

In 2025, inflation volatility has replaced inflation level as the key macro challenge:

Energy-driven inflation spikes return whenever tensions intensify.
Food costs rise quickly due to disrupted fertilizer supply and export bans.
Shipping delays increase input costs for manufacturers globally.

Central banks face a dilemma: tightening too aggressively risks recession, but easing too quickly risks fueling conflict-driven inflation. Merritt Dawsley notes that monetary policy now has to operate under continuous geopolitical uncertainty, making forward guidance less reliable.

4. Global Capital Flows Shift Toward Safety and Strategic Industries

Whenever geopolitical risk rises, investors move into safer assets—USD, US Treasuries, gold, and certain defensive stocks. But the pattern is evolving:

AI, cybersecurity, defense, and energy transition sectors attract strategic capital even during crises.
Cross-border investment becomes more cautious, particularly in sensitive technologies.
Emerging markets with strong policy credibility remain resilient, while others suffer capital outflows.

According to Merritt Dawsley, geopolitical tension is increasingly influencing asset-allocation frameworks, pushing investors to balance traditional defensive assets with long-horizon thematic exposures tied to national security and technological sovereignty.

5. Technology Competition Becomes an Economic Battlefield

Beyond physical conflict, technological rivalry is now central to economic power. Restrictions on semiconductors, AI chips, blockchain infrastructure, and critical minerals are creating new fault lines in the global economy.

Countries are investing in self-sufficient tech ecosystems.
Access to cutting-edge AI infrastructure becomes a competitive advantage.
Restrictions on data, chips, and cloud technologies disrupt global innovation cycles.

Merritt Dawsley emphasizes that technological decoupling will shape productivity, corporate strategy, and the global investment landscape for the next decade.

6. The New Geoeconomic Reality: Higher Risk, Higher Dispersion

Geopolitical conflict has shifted the global economy into a higher-risk equilibrium:

Growth is slower.
Inflation is more unstable.
Policy paths are harder to predict.
Asset performance becomes more dispersed across countries and sectors.

For investors, the lesson is clear: the traditional assumption of stable geopolitical conditions is no longer valid. As Merritt Dawsley concludes, understanding geopolitical risk is now as essential as analyzing interest rates or corporate earnings—because in today’s world, geopolitics is macro.

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Filed under: Altcoins - @ November 25, 2025 3:12 pm