Geopolitical crisis

If there is any risk which is bigger than anything right now, even more so than a sovereign crisis of a developing country, it is geopolitical tensions between the super powers. For instance, right now, all eyes are on President Putin’s upcoming speech on Friday, and it is widely anticipated that on Friday, he will be announcing the extension of the Russian border—the land taken from Ukraine.

In addition, banks like JP Morgan, Citi, and others have started to build risk scenarios that they would have never thought of in their wildest dreams, for example, taking into account the scenario of China attacking Taiwan, as the US is encouraging the Island’s independence in so many ways, and President Biden has vowed the support the country with the US army if there is a conflict. China would never like to have the presence of the US army near its boundaries, and traders believe that to eliminate this threat, it will likely do what Russia did with Ukraine. If such a scenario takes place, we would see economic sanctions like those imposed on Russia, applied to China, and that would really be the final nail in the coffin of hopes for recovery of the world's economic growth.