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Shortly before the mid-term elections to the US Congress, the current dispute over judgeships shows one thing very clearly: the USA is treading a path characterized by harsh confrontation and extreme polarization. "The US is thus mutating into the 'U-USA', the 'Un-United States of America'," says Dr Heinz-Werner Rapp, founder and head of the FERI Cognitive Finance Institute. This not only divides the USA itself, but also undermines the world economy, world trade and global coordination systems such as the UN, NATO or the G7. The U-USA thus becomes a global risk factor. This increases the level of global uncertainty, confronting investors with a new type of risk in the future. These are the central conclusions drawn by the FERI Cognitive Finance Institute in a new study on the problem of the "Un-United States of America" (U-USA).
For years already, the USA has shown a strong trend towards polarization and political division. Political disputes have been conducted with great ferocity not only since Trump. A balance of different positions is no longer desired; rational discourse is being replaced by radical views and populist phrases. This produces irreconcilable positions and a tendency towards ever tougher confrontation; the USA has thus mutated into the "Un-United States of America". "Not only the undignified dispute over the replacement on the Supreme Court has clearly shown that the USA is a deeply divided country. This clearly has negative consequences that now extend far beyond the US," Rapp warns.
The populist-influenced Trump presidency, he says, is reinforcing these trends and carrying the division to the rest of the world as well. "Donald Trump, however, is not the actual cause, but rather a catalyst and problem amplifier," Rapp stresses. The US president's harsh attacks on China, world trade and global institutions are in line with the will of many Americans who see themselves as globalisation losers. Through his program of forced dismantling of democratic structures and state institutions ("deconstruction"), however, Trump is now massively changing the rules of the game and deliberately leading the U.S. in the direction of an autocracy, according to a central finding of the study.
The sum of these developments makes the U.S. a global uncertainty factor of the first order, according to the tenor of the analysis. Trade wars, punitive tariffs, sanctions, the dollar as a weapon and a policy of 'maximum pressure' are now new hallmarks of the US. This, he said, was producing a sharp paradigm shift in geopolitics and the global economy. "The unpredictability and negative feedbacks of these policies clearly increase the level of strategic uncertainty. For investors in the capital markets, this means a new kind of risk," concludes Rapp. However, since these are hardly predictable, traditional methods of risk analysis have to be replaced by scenario analyses and other types of risk modelling.
The detailed study entitled "Risk Factor USA - The Problem of the Un-United States of America" is available for download here and available in German.