In my last two posts I described a world familiar to all of us: chaos in every direction, not unlike the 1970s or even the 1930s. But I also noted that, if you look hard enough at most of the trouble spots, what you see are a bunch of very strange bedfellows.

The question before the house is whether all these strange bedfellows are merely an interesting but meaningless phenomenon, or whether there are important implications to the odd pairings we see almost everywhere. Since I’ve spent so much time on this subject, I obviously think the latter is correct. Here’s why.

At the micro level, once former enemies – or, shall we say, “estranged societies” – begin to cooperate on any important matter, it’s hard to stop. Cooperation – literally, Latin for “working together” – results in mutual benefit. Whether countries are cooperating directly (the US and Iran sitting around a table in Geneva talking about Iran’s nuclear program) or indirectly (Iran and the US both denying that they are cooperating in the fight against ISIS, all the while being in minute-by-minute communication about it), progress on important issues gets made. This leads to cooperation on other important issues. The Great Satan (i.e., the US) and the largest of the Axes of Evil (i.e., Iran) discover that if they can find ways to cooperate there are a whole lot of issues on which progress might be made.

More broadly, it’s important to know, especially if you are investing large sums of money, whether the world order is working or breaking down. There will always be problems, of course. How could it be otherwise in a world of, according to the UN, 190 states?(1) And while it’s true that there seems to be a lot of disorder going on, that’s not actually the issue. The issue is, is the disorder morphing into an uncontrollable mushroom cloud of chaos or is the disorder being addressed in some sensible way.

The sudden arise of the strange-bedfellows phenomenon is a direct response to increasing disorder, and represents, I think, a constructive and even creative response to alarming situations around the globe. It suggests to me that the world is getting its arms around the worst of the chaos and that if I had a choice I wouldn’t want to be a bad actor just now (i.e., ISIS, Hamas, Ebola, Muslim Brotherhood, V. Putin, the Chinese military).

Longer term, of course, things could get complicated. In World Order, Henry Kissinger’s most recent tome, Dr. Kissinger notes the same chaos I’ve already alluded to and suggests that, while disorder will always be with us, the current chaos is the worst since the 1930s. He believes that our current problems can be ascribed to two causes:

* First, there is the rise of new and formidable powers that are challenging the old, US-dominated order, and which not only don’t share our fondness for free market democracy but may actually fear and detest it. (He is thinking of China, radical Islam, Russia. In the 1930s it was Germany and Japan.)

* Second, there is the power vacuum created by the gradual disintegration of the nation-state (especially in Europe) and, especially, by America’s retreat from world leadership, resulting from the country’s unhappy experiences in Iraq and Afghanistan.(2)

If America doesn’t get its act together, there is little doubt that disorder will eventually deepen into something even worse. As Kissinger writes, “It must not be assumed that, left unattended, these trends will at some point reconcile automatically to a world of balance and cooperation.” It’s useful to remember, in other words, that the disorder of the 1920s and 30s was allowed to fester while the US retreated into isolationism, and that that turmoil culminated in World War II.

In the meantime, though, the world is doing its best to cope without us. The strange-bedfellows phenomenon won’t solve all the world’s problems, but it is buying time for the US to play a more constructive role than the ones we’ve played over the past thirteen years. For investors, that may not be a resounding plus, but it at least suggests that our capital is unthreatened for the time being.

(1) There are also two so-called “observer states,” Palestine and the Vatican. The sovereignty of sixteen states is in dispute, and some of them are significant: the Peoples Republic of China, Taiwan, Israel, North and South Korea.

(2) Kissinger puts it less bluntly, but he is obviously annoyed by what he sees as bookended presidential disasters: Bush’s naïve cowboy aggressiveness, which led to the near-disintegration of Iraq, followed by Obama’s cut-and-run response, which encouraged the rise of ISIS, the resurgence of the Taliban, Russian adventurism, rising Chinese belligerence, etc.

Next up: Do We Have a Democracy Fetish?

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Please note that this post is intended to provide interested persons with an insight on the capital markets and is not intended to promote any manager or firm, nor does it intend to advertise their performance. All opinions expressed are those of Gregory Curtis and do not necessarily represent the views of Greycourt & Co., Inc., the wealth management firm with which he is associated. The information in this report is not intended to address the needs of any particular investor.

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