Global Economy Enters 'Broken Global' Equilibrium

The global economy has entered a 'Broken Global' equilibrium, where geopolitical fragmentation drives persistent scarcity and alters inflation, yields, and risk-return on capital tradeoffs across economies.

This shift in global dynamics has made it increasingly vital for companies to create robust, cost-effective supply chains.

Trade position is now a critical determinant of economic performance, with exporting economies like the US (via IEF, TLT) offering superior risk-adjusted yield profiles compared to importing economies like the Euro Area, UK, and Japan (BWX).

Importing economies face higher borrower risk premiums and supply-driven inflation, while exporters experience demand-driven inflation and enhanced return on capital.