"It's a crazy world, and it's here to stay," said Tina Fordham

Tina Fordham, a geopolitical strategist, informs James Mackreides that investors must adapt to new risks

Tina Fordham is the creator of Fordham Global Foresight and a former chief global political analyst at Citigroup. Tina has been advising senior business, government, and military leaders on how to manage political and geopolitical risk for more than 25 years. She has advised military leaders and been a senior adviser to the prime minister of the United Kingdom. She is also a member of the University of Cambridge and Columbia University advisory boards. Whitefox will release Mad World: A Geostrategy Survival Guide for Leaders in September 2026.

James Mackreides: According to your new book, Mad World: A Geostrategy Survival Guide for Leaders, businesses can no longer afford to ignore politics in the current geopolitical environment.

Tina Fordham: It's true that ignoring geopolitics was only feasible during the globalization era, which is also when the majority of today's executives, including myself, were born.

James Mackreides: A new geopolitical supercycle has emerged, as you mentioned.

Tina Fordham: The study's data covers the years 2010 through 2025. Therefore, we saw a tripling of events that posed a geopolitical risk even prior to Donald Trump's second term. Although there is hope that things will improve once Trump departs office in January 2029, the data indicates that the factors contributing to geopolitical risks are growing and have been for some time. Furthermore, the barriers that reduce the risks are either being actively dismantled or are eroding. Therefore, it is incorrect to think that we only need to live for another year and a half before things get back to normal.

James Mackreides: What specific barriers are being weakened?

Tina Fordham: We discuss some of the long-term drivers, such as diminishing trust, climate change, and income inequality, in a diagram found in the supercycle framework book. However, sound governance, central bank liquidity, institutions, and even social cohesion can help you lessen the effects of dangerous events or shocks. However, even seemingly insignificant risks can become highly disruptive when these barriers are compromised. Although most executives find it challenging to understand, this is how we attempt to apply a methodical conceptual framework to thinking about geopolitical risk.

James Mackreides: Your book is mainly intended for executives and business leaders, but would it also be applicable to regular investors choosing which assets to include in their portfolios?

Tina Fordham: In an era of unprecedented global change, there are undoubtedly ramifications for regular people who must consider how to manage their own lives, their families, and their careers.

The fact that we live in a new era is still not widely acknowledged. They believe that we are still in the era of steadily rising living standards that the majority of us grew accustomed to. In actuality, the most prosperous and peaceful time in human history occurred between the fall of the Berlin Wall in 1989 and the demise of Lehman Brothers in 2008; however, this is not the standard for the future. You are able to make mistakes.

James Mackreides: Speaking of particular issues, I've noticed that you've been much more negative about the likelihood of a long-term solution to the Strait of Hormuz situation in your recent discussions. What's the reason?

Tina Fordham: Contrary to the widespread belief at the time that the conflict between Iran, Israel, and the US would end quickly, we were among the few to publicly state that it would not be a brief war. Our logic was predicated on Iran's consistent negotiation style. Just telling them to comply with the White House's maximalist demands would never be sufficient.

Additionally, I believed that there is very little historical evidence of aerial bombardment leading to regime change, which was one of the conflict's initial objectives. Since Jimmy Carter in the 1970s, every US president has wargamed and researched potential ways to overthrow this regime. They all came to the conclusion that it was too difficult to do so without causing significant disruption and a large number of casualties, so President Trump was not going to alter that.

As a result, the US appears to have run out of long-range ammunition, while Iran is able to regenerate its drones more quickly than the US can. In the short term, the markets have been responding to the positive news that oil supplies to the Strait of Hormuz may resume, but in the long run, this war has given Iran a source of leverage that it did not previously have and a power it will not give up. Trump appears to have grown disinterested in this conflict, but he now understands that he cannot simply leave.

James Mackreides: What is most likely to happen?

Tina Fordham: The majority of market participants believe that high gas prices prior to an election are not something that America wants. Though this may have been the case during the previous 25 years, I believe that this time we will find ourselves in a conflict between war and peace, where Trump will continue to threaten since it is his only option.

Furthermore, due to the potential consequences for the rest of the region, the Gulf states have persuaded the White House not to demolish Iran's energy infrastructure. Therefore, after this war, we are probably going to be in a position where Iran is stronger if it is defeated. Additionally, the situation conveys to the rest of the world community that the US has much less power to stop them if they dislike their current borders or have a disagreement with a neighbor.

James Mackreides: On the plus side, it appears that Ukraine is retaliating against Russia and is reclaiming some of the land that the invader had taken. Will that be the case?

Tina Fordham: ft\. and yards of territory are at stake in the conflict in Ukraine. Although China has convinced Putin not to pursue nuclear weapons, he is also unlikely to engage in meaningful negotiations and consent to a ceasefire, making this a quagmire for Russia. Russia will not negotiate a deal to lift the sanctions. Putin just doesn't think like that.

Putin might want to make a big show of power because 40% of Russia's energy infrastructure has been destroyed, creating lines for gasoline. As a result, there is a significant chance that Russia will attack a NATO member. Despite the fact that Russia constantly attacks us, the majority of British people don't seem to have considered this risk.

James Mackreides: Does Putin have the same fate as Slobodan Miloevic, the dictator of Serbia who was deposed in 2000 due to a palace coup or internal discontent?

Tina Fordham: A palace coup is more likely than a popular revolution, but there is no chance that Putin will end up in The Hague. However, the problem with palace coups is that you truly need a backup plan. Additionally, Putin has ensured that he has no likely successors. Leaders like this can therefore endure for a very long time, even though he and his policies are increasingly costing the Russian elites more than they are gaining.

James Mackreides: Do you believe that Taiwan and other nations will find hope in Ukraine's valiant resistance and the fact that it has managed to at least block Russia?

Tina Fordham: Beijing is undoubtedly thinking twice about Ukraine. The fact that much weaker middle powers have dealt a serious blow to both the US and Russia indicates that might doesn't always win and can put you in a very uncomfortable situation for a long time.

James Mackreides: Trump's term will expire in January 2029. It is now anticipated that the Republicans will lose at least one congressional seat during the midterm elections. Do you believe that Trump will be restrained if the midterm results are negative, or do you think he might become even more erratic?

Tina Fordham: Many people are wondering this. The Iranian government has declared that it will no longer engage in negotiations with the United States and will instead hold off until after Trump leaves office.

Trump is already printing "Trump 2028" hats despite being limited to two terms by the US Constitution. Additionally, it's possible that Trumpism will outlive Trump. In the worst case scenario, the administration's questionable actions mean that even if they are removed from office, the threat of potential investigations could make the customary peaceful handover of power more difficult.

James Mackreides: According to your book, middle-class individuals in their 20s and 30s who are more politically conscious will be the most negatively impacted by AI, whereas older, blue-collar workers were the biggest losers from automation. Will this increase resistance to AI?

Tina Fordham: Without a doubt. Demand for legislative solutions will also rise as a result. Benefits and expectations of government assistance have increased as a result of COVID. When historians extol the virtues of earlier waves of innovation and industrialization, they often overlook the fact that working-class people were denied the right to vote during the Industrial Revolution, which is no longer the case.

In any event, the middle classes start revolutions rather than the impoverished, and people in their 50s who are being told they must work longer because the pension age is being postponed are just as incensed as university students and recent graduates. All of this will increase the pressure on governments to increase defense spending in Europe.

James Mackreides: For investors, what does this all mean?

Tina Fordham: In the past, we considered geopolitical risk in terms of what might go wrong and jeopardize a portfolio. However, rather than intermittent disruptions, recent geopolitical developments and other themes like artificial intelligence have created a situation of ongoing potential danger. This backdrop is expected to persist for more than ten years; the threats won't go away in a year or two.